Correlation Between Lord Abbett and Federated Total
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Federated Total 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 Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and Federated Total Return, you can compare the effects of market volatilities on Lord Abbett and Federated Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Federated Total.
Diversification Opportunities for Lord Abbett and Federated Total
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lord and Federated is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return 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 Short are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Total go up and down completely randomly.
Pair Corralation between Lord Abbett and Federated Total
Assuming the 90 days horizon Lord Abbett Short is expected to generate 0.8 times more return on investment than Federated Total. However, Lord Abbett Short is 1.25 times less risky than Federated Total. It trades about 0.28 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.07 per unit of risk. If you would invest 978.00 in Lord Abbett Short on October 23, 2024 and sell it today you would earn a total of 11.00 from holding Lord Abbett Short or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Federated Total Return
Performance |
| Timeline |
| Lord Abbett Short |
| Federated Total Return |
Lord Abbett and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Federated Total
The main advantage of trading using opposite Lord Abbett and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Lord Abbett vs. Fpa Queens Road | Lord Abbett vs. Applied Finance Explorer | Lord Abbett vs. Amg River Road | Lord Abbett vs. Fidelity Small Cap |
| Federated Total vs. Pace High Yield | Federated Total vs. Lord Abbett Short | Federated Total vs. Siit High Yield | Federated Total vs. Neuberger Berman Income |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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