Correlation Between Lord Abbett and Prudential High
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Prudential High 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 Prudential High 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 Prudential High Yield, you can compare the effects of market volatilities on Lord Abbett and Prudential High 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 Prudential High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Prudential High.
Diversification Opportunities for Lord Abbett and Prudential High
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Prudential is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Prudential High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential High Yield 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 Prudential High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential High Yield has no effect on the direction of Lord Abbett i.e., Lord Abbett and Prudential High go up and down completely randomly.
Pair Corralation between Lord Abbett and Prudential High
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 1.62 times more return on investment than Prudential High. However, Lord Abbett is 1.62 times more volatile than Prudential High Yield. It trades about 0.12 of its potential returns per unit of risk. Prudential High Yield is currently generating about 0.17 per unit of risk. If you would invest 1,475 in Lord Abbett Diversified on November 3, 2024 and sell it today you would earn a total of 163.00 from holding Lord Abbett Diversified or generate 11.05% 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. Prudential High Yield
Performance |
| Timeline |
| Lord Abbett Diversified |
| Prudential High Yield |
Lord Abbett and Prudential High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Prudential High
The main advantage of trading using opposite Lord Abbett and Prudential High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Prudential High 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 Prudential High will offset losses from the drop in Prudential High's long position.| Lord Abbett vs. Guggenheim Managed Futures | Lord Abbett vs. Cref Inflation Linked Bond | Lord Abbett vs. Guidepath Managed Futures | Lord Abbett vs. Ab Bond Inflation |
| Prudential High vs. Ab Global Bond | Prudential High vs. Qs Global Equity | Prudential High vs. Morningstar Global Income | Prudential High vs. Investec Global Franchise |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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