Correlation Between Lord Abbett and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Icon Financial 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 Icon Financial 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 Icon Financial Fund, you can compare the effects of market volatilities on Lord Abbett and Icon Financial 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 Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Icon Financial.
Diversification Opportunities for Lord Abbett and Icon Financial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Icon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Lord Abbett i.e., Lord Abbett and Icon Financial go up and down completely randomly.
Pair Corralation between Lord Abbett and Icon Financial
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 0.08 times more return on investment than Icon Financial. However, Lord Abbett Diversified is 12.15 times less risky than Icon Financial. It trades about 0.13 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.16 per unit of risk. If you would invest 1,636 in Lord Abbett Diversified on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Lord Abbett Diversified or generate 0.73% 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. Icon Financial Fund
Performance |
| Timeline |
| Lord Abbett Diversified |
| Icon Financial |
Lord Abbett and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Icon Financial
The main advantage of trading using opposite Lord Abbett and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial's long position.| Lord Abbett vs. T Rowe Price | Lord Abbett vs. Versatile Bond Portfolio | Lord Abbett vs. Pace High Yield | Lord Abbett vs. Dws Government Money |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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