Correlation Between Lord Abbett and Federated Fund
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Federated Fund 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 Federated Fund 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 Federated Fund For, you can compare the effects of market volatilities on Lord Abbett and Federated Fund 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 Federated Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Federated Fund.
Diversification Opportunities for Lord Abbett and Federated Fund
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Federated is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Federated Fund For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Fund For 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 Federated Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Fund For has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Fund go up and down completely randomly.
Pair Corralation between Lord Abbett and Federated Fund
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 0.74 times more return on investment than Federated Fund. However, Lord Abbett Diversified is 1.34 times less risky than Federated Fund. It trades about 0.11 of its potential returns per unit of risk. Federated Fund For is currently generating about 0.01 per unit of risk. If you would invest 1,360 in Lord Abbett Diversified on September 5, 2024 and sell it today you would earn a total of 293.00 from holding Lord Abbett Diversified or generate 21.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. Federated Fund For
Performance |
| Timeline |
| Lord Abbett Diversified |
| Federated Fund For |
Lord Abbett and Federated Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Federated Fund
The main advantage of trading using opposite Lord Abbett and Federated Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Fund 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 Federated Fund will offset losses from the drop in Federated Fund's long position.| Lord Abbett vs. T Rowe Price | Lord Abbett vs. Transamerica Asset Allocation | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Virtus Dfa 2040 |
| Federated Fund vs. Federated Emerging Market | Federated Fund vs. Federated Mdt All | Federated Fund vs. Federated Mdt Balanced | Federated Fund vs. Federated Global Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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