Correlation Between Lord Abbett and Western Asset
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Western Asset 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 Western Asset 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 Western Asset Pennsylvania, you can compare the effects of market volatilities on Lord Abbett and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Western Asset.
Diversification Opportunities for Lord Abbett and Western Asset
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lord and Western is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Western Asset Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Pennsy 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Pennsy has no effect on the direction of Lord Abbett i.e., Lord Abbett and Western Asset go up and down completely randomly.
Pair Corralation between Lord Abbett and Western Asset
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 1.37 times more return on investment than Western Asset. However, Lord Abbett is 1.37 times more volatile than Western Asset Pennsylvania. It trades about 0.11 of its potential returns per unit of risk. Western Asset Pennsylvania is currently generating about 0.04 per unit of risk. If you would invest 1,607 in Lord Abbett Diversified on August 28, 2024 and sell it today you would earn a total of 33.00 from holding Lord Abbett Diversified or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. Western Asset Pennsylvania
Performance |
| Timeline |
| Lord Abbett Diversified |
| Western Asset Pennsy |
Lord Abbett and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Western Asset
The main advantage of trading using opposite Lord Abbett and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Lord Abbett vs. Towpath Technology | Lord Abbett vs. Invesco Technology Fund | Lord Abbett vs. Biotechnology Ultrasector Profund | Lord Abbett vs. Pgim Jennison Technology |
| Western Asset vs. Rbc Emerging Markets | Western Asset vs. Doubleline Emerging Markets | Western Asset vs. Legg Mason Partners | Western Asset vs. Artisan Emerging Markets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |