Correlation Between Lord Abbett and Strategic Income
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Strategic Income 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 Strategic Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett High and Strategic Income Opportunities, you can compare the effects of market volatilities on Lord Abbett and Strategic Income 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 Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Strategic Income.
Diversification Opportunities for Lord Abbett and Strategic Income
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Strategic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High and Strategic Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income Opp 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 High are associated (or correlated) with Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income Opp has no effect on the direction of Lord Abbett i.e., Lord Abbett and Strategic Income go up and down completely randomly.
Pair Corralation between Lord Abbett and Strategic Income
Assuming the 90 days horizon Lord Abbett High is expected to generate 2.56 times more return on investment than Strategic Income. However, Lord Abbett is 2.56 times more volatile than Strategic Income Opportunities. It trades about 0.05 of its potential returns per unit of risk. Strategic Income Opportunities is currently generating about 0.08 per unit of risk. If you would invest 546.00 in Lord Abbett High on September 4, 2024 and sell it today you would earn a total of 102.00 from holding Lord Abbett High or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lord Abbett High vs. Strategic Income Opportunities
Performance |
| Timeline |
| Lord Abbett High |
| Strategic Income Opp |
Lord Abbett and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Strategic Income
The main advantage of trading using opposite Lord Abbett and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| Lord Abbett vs. Clearbridge Energy Mlp | Lord Abbett vs. World Energy Fund | Lord Abbett vs. Hennessy Bp Energy | Lord Abbett vs. Oil Gas Ultrasector |
| Strategic Income vs. Regional Bank Fund | Strategic Income vs. Regional Bank Fund | Strategic Income vs. Multimanager Lifestyle Moderate | Strategic Income vs. Multimanager Lifestyle Balanced |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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