Correlation Between Lord Abbett and Moderate Duration
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Moderate Duration 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 Moderate Duration 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 Moderate Duration Fund, you can compare the effects of market volatilities on Lord Abbett and Moderate Duration 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 Moderate Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Moderate Duration.
Diversification Opportunities for Lord Abbett and Moderate Duration
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Moderate is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High and Moderate Duration Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Duration 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 Moderate Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Duration has no effect on the direction of Lord Abbett i.e., Lord Abbett and Moderate Duration go up and down completely randomly.
Pair Corralation between Lord Abbett and Moderate Duration
Assuming the 90 days horizon Lord Abbett is expected to generate 247.0 times less return on investment than Moderate Duration. But when comparing it to its historical volatility, Lord Abbett High is 1.24 times less risky than Moderate Duration. It trades about 0.0 of its potential returns per unit of risk. Moderate Duration Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 921.00 in Moderate Duration Fund on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Moderate Duration Fund or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lord Abbett High vs. Moderate Duration Fund
Performance |
| Timeline |
| Lord Abbett High |
| Moderate Duration |
Lord Abbett and Moderate Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Moderate Duration
The main advantage of trading using opposite Lord Abbett and Moderate Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Moderate Duration 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 Moderate Duration will offset losses from the drop in Moderate Duration's long position.| Lord Abbett vs. Elfun Diversified Fund | Lord Abbett vs. Wealthbuilder Conservative Allocation | Lord Abbett vs. Lord Abbett Diversified | Lord Abbett vs. Federated Hermes Conservative |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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