Correlation Between Lord Abbett and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Commodities Strategy 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 Commodities Strategy 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 Commodities Strategy Fund, you can compare the effects of market volatilities on Lord Abbett and Commodities Strategy 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 Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Commodities Strategy.
Diversification Opportunities for Lord Abbett and Commodities Strategy
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lord and Commodities is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy 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 Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Lord Abbett i.e., Lord Abbett and Commodities Strategy go up and down completely randomly.
Pair Corralation between Lord Abbett and Commodities Strategy
Assuming the 90 days horizon Lord Abbett Small is expected to generate 1.71 times more return on investment than Commodities Strategy. However, Lord Abbett is 1.71 times more volatile than Commodities Strategy Fund. It trades about 0.32 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about -0.03 per unit of risk. If you would invest 2,232 in Lord Abbett Small on September 1, 2024 and sell it today you would earn a total of 251.00 from holding Lord Abbett Small or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Commodities Strategy Fund
Performance |
| Timeline |
| Lord Abbett Small |
| Commodities Strategy |
Lord Abbett and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Commodities Strategy
The main advantage of trading using opposite Lord Abbett and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Lord Abbett vs. Prudential Health Sciences | Lord Abbett vs. Hartford Healthcare Hls | Lord Abbett vs. Live Oak Health | Lord Abbett vs. Baron Health Care |
| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Banking Fund Class | Commodities Strategy vs. Basic Materials Fund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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