Correlation Between Lord Abbett and The Hartford
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and The Hartford 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 The Hartford 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 The Hartford Inflation, you can compare the effects of market volatilities on Lord Abbett and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and The Hartford.
Diversification Opportunities for Lord Abbett and The Hartford
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lord and The is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inflation and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of Lord Abbett i.e., Lord Abbett and The Hartford go up and down completely randomly.
Pair Corralation between Lord Abbett and The Hartford
Assuming the 90 days horizon Lord Abbett Inflation is expected to generate 0.86 times more return on investment than The Hartford. However, Lord Abbett Inflation is 1.17 times less risky than The Hartford. It trades about 0.08 of its potential returns per unit of risk. The Hartford Inflation is currently generating about -0.03 per unit of risk. If you would invest 1,159 in Lord Abbett Inflation on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Lord Abbett Inflation or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Inflation vs. The Hartford Inflation
Performance |
| Timeline |
| Lord Abbett Inflation |
| The Hartford Inflation |
Lord Abbett and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and The Hartford
The main advantage of trading using opposite Lord Abbett and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Lord Abbett vs. Vanguard Short Term Inflation Protected | Lord Abbett vs. HUMANA INC | Lord Abbett vs. Aquagold International | Lord Abbett vs. Barloworld Ltd ADR |
| The Hartford vs. Vanguard Inflation Protected Securities | The Hartford vs. Vanguard Inflation Protected Securities | The Hartford vs. American Funds Inflation | The Hartford vs. American Funds Inflation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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