Correlation Between Lord Abbett and Sit Mid
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Sit Mid 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 Sit Mid 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 Sit Mid Cap, you can compare the effects of market volatilities on Lord Abbett and Sit Mid 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 Sit Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Sit Mid.
Diversification Opportunities for Lord Abbett and Sit Mid
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and SIT is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Sit Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mid Cap 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 Sit Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mid Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Sit Mid go up and down completely randomly.
Pair Corralation between Lord Abbett and Sit Mid
Assuming the 90 days horizon Lord Abbett is expected to generate 1.48 times less return on investment than Sit Mid. In addition to that, Lord Abbett is 1.15 times more volatile than Sit Mid Cap. It trades about 0.09 of its total potential returns per unit of risk. Sit Mid Cap is currently generating about 0.16 per unit of volatility. If you would invest 2,461 in Sit Mid Cap on August 30, 2024 and sell it today you would earn a total of 90.00 from holding Sit Mid Cap or generate 3.66% 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. Sit Mid Cap
Performance |
| Timeline |
| Lord Abbett Health |
| Sit Mid Cap |
Lord Abbett and Sit Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Sit Mid
The main advantage of trading using opposite Lord Abbett and Sit Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Sit Mid 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 Sit Mid will offset losses from the drop in Sit Mid's long position.| Lord Abbett vs. Fidelity Advisor Technology | Lord Abbett vs. Fidelity Advisor Biotechnology | Lord Abbett vs. Fidelity Advisor Financial | Lord Abbett vs. Fidelity Advisor Utilities |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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