Correlation Between Lord Abbett and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Transamerica Intermediate 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 Transamerica Intermediate 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 Transamerica Intermediate Muni, you can compare the effects of market volatilities on Lord Abbett and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Transamerica Intermediate.
Diversification Opportunities for Lord Abbett and Transamerica Intermediate
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Transamerica is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intermediate and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Lord Abbett i.e., Lord Abbett and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Lord Abbett and Transamerica Intermediate
Assuming the 90 days horizon Lord Abbett Intermediate is expected to generate 1.41 times more return on investment than Transamerica Intermediate. However, Lord Abbett is 1.41 times more volatile than Transamerica Intermediate Muni. It trades about 0.04 of its potential returns per unit of risk. Transamerica Intermediate Muni 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. Transamerica Intermediate Muni
Performance |
| Timeline |
| Lord Abbett Intermediate |
| Transamerica Intermediate |
Lord Abbett and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Transamerica Intermediate
The main advantage of trading using opposite Lord Abbett and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate'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 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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