Correlation Between Lord Abbett and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Fidelity China 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 Fidelity China 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 Fidelity China Region, you can compare the effects of market volatilities on Lord Abbett and Fidelity China 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 Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Fidelity China.
Diversification Opportunities for Lord Abbett and Fidelity China
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Fidelity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Fidelity China Region in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Region 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 Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Region has no effect on the direction of Lord Abbett i.e., Lord Abbett and Fidelity China go up and down completely randomly.
Pair Corralation between Lord Abbett and Fidelity China
Assuming the 90 days horizon Lord Abbett is expected to generate 1.02 times less return on investment than Fidelity China. But when comparing it to its historical volatility, Lord Abbett Health is 1.48 times less risky than Fidelity China. It trades about 0.06 of its potential returns per unit of risk. Fidelity China Region is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,605 in Fidelity China Region on September 1, 2024 and sell it today you would earn a total of 264.00 from holding Fidelity China Region or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Health vs. Fidelity China Region
Performance |
| Timeline |
| Lord Abbett Health |
| Fidelity China Region |
Lord Abbett and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Fidelity China
The main advantage of trading using opposite Lord Abbett and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Fidelity China 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 Fidelity China will offset losses from the drop in Fidelity China's long position.| Lord Abbett vs. Enhanced Large Pany | Lord Abbett vs. Aqr Large Cap | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Jhancock Disciplined Value |
| Fidelity China vs. Lord Abbett Small | Fidelity China vs. Mutual Of America | Fidelity China vs. Applied Finance Explorer | Fidelity China vs. Pace Smallmedium Value |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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