Correlation Between Lord Abbett and Strategic Bond
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Strategic Bond 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 Strategic Bond 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 Strategic Bond Fund, you can compare the effects of market volatilities on Lord Abbett and Strategic Bond 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 Strategic Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Strategic Bond.
Diversification Opportunities for Lord Abbett and Strategic Bond
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and Strategic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Strategic Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Bond 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 Strategic Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Bond has no effect on the direction of Lord Abbett i.e., Lord Abbett and Strategic Bond go up and down completely randomly.
Pair Corralation between Lord Abbett and Strategic Bond
Assuming the 90 days horizon Lord Abbett Small is expected to under-perform the Strategic Bond. In addition to that, Lord Abbett is 2.95 times more volatile than Strategic Bond Fund. It trades about -0.04 of its total potential returns per unit of risk. Strategic Bond Fund is currently generating about 0.16 per unit of volatility. If you would invest 908.00 in Strategic Bond Fund on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Strategic Bond Fund or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Strategic Bond Fund
Performance |
| Timeline |
| Lord Abbett Small |
| Strategic Bond |
Lord Abbett and Strategic Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Strategic Bond
The main advantage of trading using opposite Lord Abbett and Strategic Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Strategic Bond 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 Strategic Bond will offset losses from the drop in Strategic Bond's long position.| Lord Abbett vs. Siit Ultra Short | Lord Abbett vs. Quantitative Longshort Equity | Lord Abbett vs. Virtus Multi Sector Short | Lord Abbett vs. Aqr Long Short Equity |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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