Correlation Between Lord Abbett and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aberdeen China 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 China 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 China Oppty, you can compare the effects of market volatilities on Lord Abbett and Aberdeen China 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 China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aberdeen China.
Diversification Opportunities for Lord Abbett and Aberdeen China
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lord and Aberdeen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty 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 China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aberdeen China go up and down completely randomly.
Pair Corralation between Lord Abbett and Aberdeen China
Assuming the 90 days horizon Lord Abbett Small is expected to generate 0.83 times more return on investment than Aberdeen China. However, Lord Abbett Small is 1.21 times less risky than Aberdeen China. It trades about 0.09 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.09 per unit of risk. If you would invest 2,149 in Lord Abbett Small on October 26, 2024 and sell it today you would earn a total of 35.00 from holding Lord Abbett Small or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Aberdeen China Oppty
Performance |
| Timeline |
| Lord Abbett Small |
| Aberdeen China Oppty |
Lord Abbett and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aberdeen China
The main advantage of trading using opposite Lord Abbett and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aberdeen China 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 China will offset losses from the drop in Aberdeen China's long position.| Lord Abbett vs. Dws Emerging Markets | Lord Abbett vs. Embark Commodity Strategy | Lord Abbett vs. Commodities Strategy Fund | Lord Abbett vs. Artisan Developing World |
| Aberdeen China vs. Ultrasmall Cap Profund Ultrasmall Cap | Aberdeen China vs. Ultramid Cap Profund Ultramid Cap | Aberdeen China vs. Fidelity Small Cap | Aberdeen China vs. Lord Abbett Small |
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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