Correlation Between Lord Abbett and Money Market
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Money Market 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 Money Market 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 Money Market Obligations, you can compare the effects of market volatilities on Lord Abbett and Money Market 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 Money Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Money Market.
Diversification Opportunities for Lord Abbett and Money Market
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Money is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Money Market Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Money Market Obligations 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 Money Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Money Market Obligations has no effect on the direction of Lord Abbett i.e., Lord Abbett and Money Market go up and down completely randomly.
Pair Corralation between Lord Abbett and Money Market
Assuming the 90 days horizon Lord Abbett is expected to generate 81.31 times less return on investment than Money Market. But when comparing it to its historical volatility, Lord Abbett Small is 45.33 times less risky than Money Market. It trades about 0.07 of its potential returns per unit of risk. Money Market Obligations is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 316.00 in Money Market Obligations on September 4, 2024 and sell it today you would lose (216.00) from holding Money Market Obligations or give up 68.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 42.22% |
| Values | Daily Returns |
Lord Abbett Small vs. Money Market Obligations
Performance |
| Timeline |
| Lord Abbett Small |
| Money Market Obligations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lord Abbett and Money Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Money Market
The main advantage of trading using opposite Lord Abbett and Money Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Money Market 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 Money Market will offset losses from the drop in Money Market's long position.| Lord Abbett vs. Ancorathelen Small Mid Cap | Lord Abbett vs. Champlain Small | Lord Abbett vs. The Hartford Small | Lord Abbett vs. Oklahoma College Savings |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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