Correlation Between Lord Abbett and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Salient Tactical 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 Salient Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Diversified and Salient Tactical Plus, you can compare the effects of market volatilities on Lord Abbett and Salient Tactical 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 Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Salient Tactical.
Diversification Opportunities for Lord Abbett and Salient Tactical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Salient is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Salient Tactical Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Plus 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 Diversified are associated (or correlated) with Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Plus has no effect on the direction of Lord Abbett i.e., Lord Abbett and Salient Tactical go up and down completely randomly.
Pair Corralation between Lord Abbett and Salient Tactical
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 0.68 times more return on investment than Salient Tactical. However, Lord Abbett Diversified is 1.48 times less risky than Salient Tactical. It trades about 0.18 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about 0.05 per unit of risk. If you would invest 1,530 in Lord Abbett Diversified on August 29, 2024 and sell it today you would earn a total of 115.00 from holding Lord Abbett Diversified or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. Salient Tactical Plus
Performance |
| Timeline |
| Lord Abbett Diversified |
| Salient Tactical Plus |
Lord Abbett and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Salient Tactical
The main advantage of trading using opposite Lord Abbett and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Salient Tactical 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 Salient Tactical will offset losses from the drop in Salient Tactical's long position.| Lord Abbett vs. Guggenheim Diversified Income | Lord Abbett vs. Fidelity Advisor Diversified | Lord Abbett vs. Small Cap Stock | Lord Abbett vs. Western Asset Diversified |
| Salient Tactical vs. Lord Abbett Diversified | Salient Tactical vs. Pgim Jennison Diversified | Salient Tactical vs. Tiaa Cref Small Cap Blend | Salient Tactical vs. Wasatch Small Cap |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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