Correlation Between Lord Abbett and First Eagle
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and First Eagle 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 First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and First Eagle Value, you can compare the effects of market volatilities on Lord Abbett and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and First Eagle.
Diversification Opportunities for Lord Abbett and First Eagle
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and First is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and First Eagle Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Value 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 Short are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Value has no effect on the direction of Lord Abbett i.e., Lord Abbett and First Eagle go up and down completely randomly.
Pair Corralation between Lord Abbett and First Eagle
Assuming the 90 days horizon Lord Abbett Short is expected to generate 0.12 times more return on investment than First Eagle. However, Lord Abbett Short is 8.67 times less risky than First Eagle. It trades about 0.05 of its potential returns per unit of risk. First Eagle Value is currently generating about -0.14 per unit of risk. If you would invest 387.00 in Lord Abbett Short on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Lord Abbett Short or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. First Eagle Value
Performance |
| Timeline |
| Lord Abbett Short |
| First Eagle Value |
Lord Abbett and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and First Eagle
The main advantage of trading using opposite Lord Abbett and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Lord Abbett vs. Blackrock Financial Institutions | Lord Abbett vs. Goldman Sachs Financial | Lord Abbett vs. Davis Financial Fund | Lord Abbett vs. Royce Global Financial |
| First Eagle vs. Alpine Ultra Short | First Eagle vs. Lord Abbett Short | First Eagle vs. Virtus Multi Sector Short | First Eagle vs. Dreyfus Short Intermediate |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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