Correlation Between Lord Abbett and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aberdeen Gbl 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 Aberdeen Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Small and Aberdeen Gbl Eq, you can compare the effects of market volatilities on Lord Abbett and Aberdeen Gbl 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 Aberdeen Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aberdeen Gbl.
Diversification Opportunities for Lord Abbett and Aberdeen Gbl
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lord and Aberdeen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Aberdeen Gbl Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Gbl Eq 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 Small are associated (or correlated) with Aberdeen Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Gbl Eq has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Lord Abbett and Aberdeen Gbl
Assuming the 90 days horizon Lord Abbett Small is expected to generate 1.34 times more return on investment than Aberdeen Gbl. However, Lord Abbett is 1.34 times more volatile than Aberdeen Gbl Eq. It trades about 0.17 of its potential returns per unit of risk. Aberdeen Gbl Eq is currently generating about 0.06 per unit of risk. If you would invest 2,138 in Lord Abbett Small on October 25, 2024 and sell it today you would earn a total of 64.00 from holding Lord Abbett Small or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lord Abbett Small vs. Aberdeen Gbl Eq
Performance |
| Timeline |
| Lord Abbett Small |
| Aberdeen Gbl Eq |
Lord Abbett and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aberdeen Gbl
The main advantage of trading using opposite Lord Abbett and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aberdeen Gbl 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 Aberdeen Gbl will offset losses from the drop in Aberdeen Gbl's long position.| Lord Abbett vs. Tax Managed Large Cap | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Franklin Moderate Allocation | Lord Abbett vs. Pnc Balanced Allocation |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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