Correlation Between Lord Abbett and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Financial, you can compare the effects of market volatilities on Lord Abbett and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Prudential Jennison.
Diversification Opportunities for Lord Abbett and Prudential Jennison
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Prudential is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Prudential Jennison Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Lord Abbett i.e., Lord Abbett and Prudential Jennison go up and down completely randomly.
Pair Corralation between Lord Abbett and Prudential Jennison
Assuming the 90 days horizon Lord Abbett Short is expected to generate 0.08 times more return on investment than Prudential Jennison. However, Lord Abbett Short is 13.21 times less risky than Prudential Jennison. It trades about 0.22 of its potential returns per unit of risk. Prudential Jennison Financial is currently generating about 0.0 per unit of risk. If you would invest 387.00 in Lord Abbett Short on September 14, 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. Prudential Jennison Financial
Performance |
| Timeline |
| Lord Abbett Short |
| Prudential Jennison |
Lord Abbett and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Prudential Jennison
The main advantage of trading using opposite Lord Abbett and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
| Prudential Jennison vs. Angel Oak Ultrashort | Prudential Jennison vs. Rbc Short Duration | Prudential Jennison vs. Lord Abbett Short | Prudential Jennison vs. Virtus Multi Sector 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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