Correlation Between Lord Abbett and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Nasdaq 100 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 Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett International and Nasdaq 100 Fund Class, you can compare the effects of market volatilities on Lord Abbett and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Nasdaq 100.
Diversification Opportunities for Lord Abbett and Nasdaq 100
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Nasdaq is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett International and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund 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 International are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Lord Abbett and Nasdaq 100
Assuming the 90 days horizon Lord Abbett is expected to generate 2.12 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Lord Abbett International is 1.31 times less risky than Nasdaq 100. It trades about 0.05 of its potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,555 in Nasdaq 100 Fund Class on September 3, 2024 and sell it today you would earn a total of 2,168 from holding Nasdaq 100 Fund Class or generate 39.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett International vs. Nasdaq 100 Fund Class
Performance |
| Timeline |
| Lord Abbett International |
| Nasdaq 100 Fund |
Lord Abbett and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Nasdaq 100
The main advantage of trading using opposite Lord Abbett and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Lord Abbett vs. Nasdaq 100 Fund Class | Lord Abbett vs. Qs Growth Fund | Lord Abbett vs. Ab Small Cap | Lord Abbett vs. Small Cap Stock |
| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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