Correlation Between Lord Abbett and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Americafirst Defensive 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 Americafirst Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Inflation and Americafirst Defensive Growth, you can compare the effects of market volatilities on Lord Abbett and Americafirst Defensive 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 Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Americafirst Defensive.
Diversification Opportunities for Lord Abbett and Americafirst Defensive
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lord and Americafirst is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inflation and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive 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 Inflation are associated (or correlated) with Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Lord Abbett i.e., Lord Abbett and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Lord Abbett and Americafirst Defensive
Assuming the 90 days horizon Lord Abbett is expected to generate 9.0 times less return on investment than Americafirst Defensive. But when comparing it to its historical volatility, Lord Abbett Inflation is 1.92 times less risky than Americafirst Defensive. It trades about 0.03 of its potential returns per unit of risk. Americafirst Defensive Growth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 929.00 in Americafirst Defensive Growth on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Americafirst Defensive Growth or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lord Abbett Inflation vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Lord Abbett Inflation |
| Americafirst Defensive |
Lord Abbett and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Americafirst Defensive
The main advantage of trading using opposite Lord Abbett and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Americafirst Defensive 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 Americafirst Defensive will offset losses from the drop in Americafirst Defensive's long position.| Lord Abbett vs. Fidelity Advisor Technology | Lord Abbett vs. Blackrock Science Technology | Lord Abbett vs. Vanguard Information Technology | Lord Abbett vs. Red Oak Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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