Correlation Between Lord Abbett and City National
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and City National 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 City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Intl and City National Rochdale, you can compare the effects of market volatilities on Lord Abbett and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and City National.
Diversification Opportunities for Lord Abbett and City National
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and City is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intl and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 Intl are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Lord Abbett i.e., Lord Abbett and City National go up and down completely randomly.
Pair Corralation between Lord Abbett and City National
Assuming the 90 days horizon Lord Abbett Intl is expected to generate 4.96 times more return on investment than City National. However, Lord Abbett is 4.96 times more volatile than City National Rochdale. It trades about 0.1 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.05 per unit of risk. If you would invest 1,967 in Lord Abbett Intl on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Lord Abbett Intl or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lord Abbett Intl vs. City National Rochdale
Performance |
| Timeline |
| Lord Abbett Intl |
| City National Rochdale |
Lord Abbett and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and City National
The main advantage of trading using opposite Lord Abbett and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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