Correlation Between Lord Abbett and Fidelity California
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Fidelity California 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 Fidelity California 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 Fidelity California Municipal, you can compare the effects of market volatilities on Lord Abbett and Fidelity California 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 Fidelity California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Fidelity California.
Diversification Opportunities for Lord Abbett and Fidelity California
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intermediate and Fidelity California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity California 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 Fidelity California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity California has no effect on the direction of Lord Abbett i.e., Lord Abbett and Fidelity California go up and down completely randomly.
Pair Corralation between Lord Abbett and Fidelity California
Assuming the 90 days horizon Lord Abbett Intermediate is expected to generate 1.42 times more return on investment than Fidelity California. However, Lord Abbett is 1.42 times more volatile than Fidelity California Municipal. It trades about 0.04 of its potential returns per unit of risk. Fidelity California Municipal is currently generating about 0.04 per unit of risk. If you would invest 965.00 in Lord Abbett Intermediate on October 11, 2024 and sell it today you would earn a total of 57.00 from holding Lord Abbett Intermediate or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lord Abbett Intermediate vs. Fidelity California Municipal
Performance |
| Timeline |
| Lord Abbett Intermediate |
| Fidelity California |
Lord Abbett and Fidelity California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Fidelity California
The main advantage of trading using opposite Lord Abbett and Fidelity California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Fidelity California 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 Fidelity California will offset losses from the drop in Fidelity California's long position.| Lord Abbett vs. Financials Ultrasector Profund | Lord Abbett vs. Blackrock Financial Institutions | Lord Abbett vs. Rmb Mendon Financial | Lord Abbett vs. Blackstone Secured Lending |
| Fidelity California vs. T Rowe Price | Fidelity California vs. Alliancebernstein National Municipalome | Fidelity California vs. Virtus Seix Government | Fidelity California vs. Franklin Adjustable Government |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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