Correlation Between Lord Abbett and Federated Bond
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Federated Bond at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lord Abbett and Federated Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Health and Federated Bond Fund, you can compare the effects of market volatilities on Lord Abbett and Federated Bond and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lord Abbett with a short position of Federated Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Federated Bond.
Diversification Opportunities for Lord Abbett and Federated Bond
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Federated is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Federated Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Bond and Lord Abbett is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lord Abbett Health are associated (or correlated) with Federated Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Bond has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Bond go up and down completely randomly.
Pair Corralation between Lord Abbett and Federated Bond
Assuming the 90 days horizon Lord Abbett Health is expected to generate 2.84 times more return on investment than Federated Bond. However, Lord Abbett is 2.84 times more volatile than Federated Bond Fund. It trades about 0.03 of its potential returns per unit of risk. Federated Bond Fund is currently generating about 0.05 per unit of risk. If you would invest 1,611 in Lord Abbett Health on December 4, 2024 and sell it today you would earn a total of 234.00 from holding Lord Abbett Health or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lord Abbett Health vs. Federated Bond Fund
Performance |
| Timeline |
| Lord Abbett Health |
| Federated Bond |
Lord Abbett and Federated Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Federated Bond
The main advantage of trading using opposite Lord Abbett and Federated Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Bond can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Federated Bond will offset losses from the drop in Federated Bond's long position.| Lord Abbett vs. Transamerica Funds | Lord Abbett vs. Us Government Securities | Lord Abbett vs. Government Securities Fund | Lord Abbett vs. Blackrock Government Bond |
| Federated Bond vs. Ab Bond Inflation | Federated Bond vs. Rbc Impact Bond | Federated Bond vs. Doubleline E Fixed | Federated Bond vs. Intermediate Term Bond Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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