Correlation Between Lord Abbett and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Federated Strategic 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 Federated Strategic 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 Federated Strategic Income, you can compare the effects of market volatilities on Lord Abbett and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Federated Strategic.
Diversification Opportunities for Lord Abbett and Federated Strategic
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Federated is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Strategic go up and down completely randomly.
Pair Corralation between Lord Abbett and Federated Strategic
Assuming the 90 days horizon Lord Abbett Small is expected to generate 3.48 times more return on investment than Federated Strategic. However, Lord Abbett is 3.48 times more volatile than Federated Strategic Income. It trades about 0.07 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.09 per unit of risk. If you would invest 1,682 in Lord Abbett Small on September 14, 2024 and sell it today you would earn a total of 769.00 from holding Lord Abbett Small or generate 45.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Federated Strategic Income
Performance |
| Timeline |
| Lord Abbett Small |
| Federated Strategic |
Lord Abbett and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Federated Strategic
The main advantage of trading using opposite Lord Abbett and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Lord Abbett vs. Touchstone Large Cap | Lord Abbett vs. Upright Assets Allocation | Lord Abbett vs. Fm Investments Large | Lord Abbett vs. Aqr Large Cap |
| Federated Strategic vs. Lord Abbett Small | Federated Strategic vs. Amg River Road | Federated Strategic vs. Heartland Value Plus | Federated Strategic vs. Pace Smallmedium Value |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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