Correlation Between Lord Abbett and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Massmutual Select 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 Massmutual Select 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 Massmutual Select T, you can compare the effects of market volatilities on Lord Abbett and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Massmutual Select.
Diversification Opportunities for Lord Abbett and Massmutual Select
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lord and Massmutual is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select has no effect on the direction of Lord Abbett i.e., Lord Abbett and Massmutual Select go up and down completely randomly.
Pair Corralation between Lord Abbett and Massmutual Select
Assuming the 90 days horizon Lord Abbett is expected to generate 1.96 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Lord Abbett Short is 2.48 times less risky than Massmutual Select. It trades about 0.14 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,219 in Massmutual Select T on September 12, 2024 and sell it today you would earn a total of 213.00 from holding Massmutual Select T or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Massmutual Select T
Performance |
| Timeline |
| Lord Abbett Short |
| Massmutual Select |
Lord Abbett and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Massmutual Select
The main advantage of trading using opposite Lord Abbett and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Lord Abbett vs. Vanguard Short Term Bond | Lord Abbett vs. Vanguard Short Term Investment Grade | Lord Abbett vs. Vanguard Short Term Investment Grade | Lord Abbett vs. Vanguard Short Term Investment Grade |
| Massmutual Select vs. Easterly Snow Longshort | Massmutual Select vs. Touchstone Ultra Short | Massmutual Select vs. Dreyfus Short Intermediate | Massmutual Select vs. Lord Abbett Short |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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