Correlation Between Lord Abbett and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Tekla Healthcare 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 Tekla Healthcare 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 Tekla Healthcare Investors, you can compare the effects of market volatilities on Lord Abbett and Tekla Healthcare 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 Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Tekla Healthcare.
Diversification Opportunities for Lord Abbett and Tekla Healthcare
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Tekla is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv 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 Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Lord Abbett i.e., Lord Abbett and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Lord Abbett and Tekla Healthcare
Assuming the 90 days horizon Lord Abbett Health is expected to generate 0.95 times more return on investment than Tekla Healthcare. However, Lord Abbett Health is 1.05 times less risky than Tekla Healthcare. It trades about 0.01 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.04 per unit of risk. If you would invest 1,921 in Lord Abbett Health on November 1, 2024 and sell it today you would earn a total of 2.00 from holding Lord Abbett Health or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Health vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Lord Abbett Health |
| Tekla Healthcare Inv |
Lord Abbett and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Tekla Healthcare
The main advantage of trading using opposite Lord Abbett and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare's long position.| Lord Abbett vs. Smallcap Fund Fka | Lord Abbett vs. Hunter Small Cap | Lord Abbett vs. Kinetics Small Cap | Lord Abbett vs. Tax Managed Mid Small |
| Tekla Healthcare vs. Alpsalerian Energy Infrastructure | Tekla Healthcare vs. World Energy Fund | Tekla Healthcare vs. Fidelity Advisor Energy | Tekla Healthcare vs. Goldman Sachs Mlp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |