Correlation Between Lord Abbett and Braddock Multi-strategy
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Braddock Multi-strategy 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 Braddock Multi-strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Intermediate and Braddock Multi Strategy Income, you can compare the effects of market volatilities on Lord Abbett and Braddock Multi-strategy 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 Braddock Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Braddock Multi-strategy.
Diversification Opportunities for Lord Abbett and Braddock Multi-strategy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Braddock is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intermediate and Braddock Multi Strategy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braddock Multi Strategy 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 Intermediate are associated (or correlated) with Braddock Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braddock Multi Strategy has no effect on the direction of Lord Abbett i.e., Lord Abbett and Braddock Multi-strategy go up and down completely randomly.
Pair Corralation between Lord Abbett and Braddock Multi-strategy
Assuming the 90 days horizon Lord Abbett Intermediate is expected to under-perform the Braddock Multi-strategy. In addition to that, Lord Abbett is 1.29 times more volatile than Braddock Multi Strategy Income. It trades about -0.34 of its total potential returns per unit of risk. Braddock Multi Strategy Income is currently generating about -0.35 per unit of volatility. If you would invest 663.00 in Braddock Multi Strategy Income on October 9, 2024 and sell it today you would lose (7.00) from holding Braddock Multi Strategy Income or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Intermediate vs. Braddock Multi Strategy Income
Performance |
| Timeline |
| Lord Abbett Intermediate |
| Braddock Multi Strategy |
Lord Abbett and Braddock Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Braddock Multi-strategy
The main advantage of trading using opposite Lord Abbett and Braddock Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Braddock Multi-strategy 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 Braddock Multi-strategy will offset losses from the drop in Braddock Multi-strategy's long position.| Lord Abbett vs. Federated Hermes Conservative | Lord Abbett vs. Huber Capital Diversified | Lord Abbett vs. Tax Free Conservative Income | Lord Abbett vs. Thrivent Diversified Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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