Correlation Between Lord Abbett and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Lord Abbett and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Floating Rate.
Diversification Opportunities for Lord Abbett and Floating Rate
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Floating is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Lord Abbett i.e., Lord Abbett and Floating Rate go up and down completely randomly.
Pair Corralation between Lord Abbett and Floating Rate
Assuming the 90 days horizon Lord Abbett Health is expected to generate 6.56 times more return on investment than Floating Rate. However, Lord Abbett is 6.56 times more volatile than Floating Rate Fund. It trades about 0.09 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.23 per unit of risk. If you would invest 1,685 in Lord Abbett Health on September 3, 2024 and sell it today you would earn a total of 402.00 from holding Lord Abbett Health or generate 23.86% 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. Floating Rate Fund
Performance |
| Timeline |
| Lord Abbett Health |
| Floating Rate |
Lord Abbett and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Floating Rate
The main advantage of trading using opposite Lord Abbett and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Lord Abbett vs. Ab Government Exchange | Lord Abbett vs. Us Government Securities | Lord Abbett vs. Us Government Securities | Lord Abbett vs. Short Term Government Fund |
| Floating Rate vs. Dreyfus Government Cash | Floating Rate vs. Us Government Securities | Floating Rate vs. Us Government Securities | Floating Rate vs. Inverse Government Long |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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