Correlation Between Lord Abbett and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Lord Abbett and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Emerging Markets.
Diversification Opportunities for Lord Abbett and Emerging Markets
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lord and Emerging is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Lord Abbett i.e., Lord Abbett and Emerging Markets go up and down completely randomly.
Pair Corralation between Lord Abbett and Emerging Markets
Assuming the 90 days horizon Lord Abbett Small is expected to generate 1.39 times more return on investment than Emerging Markets. However, Lord Abbett is 1.39 times more volatile than Emerging Markets Fund. It trades about 0.17 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.0 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Emerging Markets Fund
Performance |
| Timeline |
| Lord Abbett Small |
| Emerging Markets |
Lord Abbett and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Emerging Markets
The main advantage of trading using opposite Lord Abbett and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' 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 |
| Emerging Markets vs. Valic Company I | Emerging Markets vs. Lord Abbett Small | Emerging Markets vs. Small Cap Value | Emerging Markets vs. Fpa Queens Road |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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