Correlation Between Lord Abbett and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Touchstone Sands 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 Touchstone Sands 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 Touchstone Sands Capital, you can compare the effects of market volatilities on Lord Abbett and Touchstone Sands 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 Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Touchstone Sands.
Diversification Opportunities for Lord Abbett and Touchstone Sands
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Touchstone is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital 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 Touchstone Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Lord Abbett i.e., Lord Abbett and Touchstone Sands go up and down completely randomly.
Pair Corralation between Lord Abbett and Touchstone Sands
Assuming the 90 days horizon Lord Abbett Health is expected to generate 1.18 times more return on investment than Touchstone Sands. However, Lord Abbett is 1.18 times more volatile than Touchstone Sands Capital. It trades about 0.1 of its potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.06 per unit of risk. If you would invest 1,539 in Lord Abbett Health on September 1, 2024 and sell it today you would earn a total of 445.00 from holding Lord Abbett Health or generate 28.91% 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. Touchstone Sands Capital
Performance |
| Timeline |
| Lord Abbett Health |
| Touchstone Sands Capital |
Lord Abbett and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Touchstone Sands
The main advantage of trading using opposite Lord Abbett and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Touchstone Sands 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 Touchstone Sands will offset losses from the drop in Touchstone Sands' 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 |
| Touchstone Sands vs. Touchstone Small Cap | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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