Correlation Between Western Asset and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Western Asset and Lord Abbett 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 Western Asset and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Pennsylvania and Lord Abbett Diversified, you can compare the effects of market volatilities on Western Asset and Lord Abbett 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 Western Asset with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Lord Abbett.
Diversification Opportunities for Western Asset and Lord Abbett
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Lord is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Pennsylvania and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Western Asset 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 Western Asset Pennsylvania are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Diversified has no effect on the direction of Western Asset i.e., Western Asset and Lord Abbett go up and down completely randomly.
Pair Corralation between Western Asset and Lord Abbett
Assuming the 90 days horizon Western Asset is expected to generate 2.07 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Western Asset Pennsylvania is 1.15 times less risky than Lord Abbett. It trades about 0.11 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,618 in Lord Abbett Diversified on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Lord Abbett Diversified or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Pennsylvania vs. Lord Abbett Diversified
Performance |
| Timeline |
| Western Asset Pennsy |
| Lord Abbett Diversified |
Western Asset and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Lord Abbett
The main advantage of trading using opposite Western Asset and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Western Asset vs. Rbc Emerging Markets | Western Asset vs. Doubleline Emerging Markets | Western Asset vs. Legg Mason Partners | Western Asset vs. Artisan Emerging Markets |
| Lord Abbett vs. Towpath Technology | Lord Abbett vs. Invesco Technology Fund | Lord Abbett vs. Biotechnology Ultrasector Profund | Lord Abbett vs. Pgim Jennison Technology |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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