Correlation Between Lord Abbett and State Street
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and State Street 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 State Street 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 State Street Income, you can compare the effects of market volatilities on Lord Abbett and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and State Street.
Diversification Opportunities for Lord Abbett and State Street
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and State is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and State Street Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Income 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Income has no effect on the direction of Lord Abbett i.e., Lord Abbett and State Street go up and down completely randomly.
Pair Corralation between Lord Abbett and State Street
Assuming the 90 days horizon Lord Abbett Small is expected to generate 4.01 times more return on investment than State Street. However, Lord Abbett is 4.01 times more volatile than State Street Income. It trades about 0.27 of its potential returns per unit of risk. State Street Income is currently generating about 0.04 per unit of risk. If you would invest 2,251 in Lord Abbett Small on August 28, 2024 and sell it today you would earn a total of 226.00 from holding Lord Abbett Small or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. State Street Income
Performance |
| Timeline |
| Lord Abbett Small |
| State Street Income |
Lord Abbett and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and State Street
The main advantage of trading using opposite Lord Abbett and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Lord Abbett vs. Pace High Yield | Lord Abbett vs. Alliancebernstein Global High | Lord Abbett vs. Artisan High Income | Lord Abbett vs. Pace High Yield |
| State Street vs. Amg River Road | State Street vs. Lord Abbett Small | State Street vs. Fidelity Small Cap | State Street vs. Mid Cap Value Profund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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