Correlation Between Lord Abbett and Multi Index
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Multi Index 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 Multi Index 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 Multi Index 2045 Lifetime, you can compare the effects of market volatilities on Lord Abbett and Multi Index 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 Multi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Multi Index.
Diversification Opportunities for Lord Abbett and Multi Index
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Multi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Multi Index 2045 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2045 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 Multi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2045 has no effect on the direction of Lord Abbett i.e., Lord Abbett and Multi Index go up and down completely randomly.
Pair Corralation between Lord Abbett and Multi Index
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 0.48 times more return on investment than Multi Index. However, Lord Abbett Diversified is 2.07 times less risky than Multi Index. It trades about 0.04 of its potential returns per unit of risk. Multi Index 2045 Lifetime is currently generating about -0.07 per unit of risk. If you would invest 1,635 in Lord Abbett Diversified on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Lord Abbett Diversified or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. Multi Index 2045 Lifetime
Performance |
| Timeline |
| Lord Abbett Diversified |
| Multi Index 2045 |
Lord Abbett and Multi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Multi Index
The main advantage of trading using opposite Lord Abbett and Multi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Multi Index 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 Multi Index will offset losses from the drop in Multi Index's long position.| Lord Abbett vs. Scout E Bond | Lord Abbett vs. Doubleline E Fixed | Lord Abbett vs. Ambrus Core Bond | Lord Abbett vs. Ab Bond Inflation |
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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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