Correlation Between Lord Abbett and Nuveen California
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Nuveen California 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 Nuveen California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Affiliated and Nuveen California Amt, you can compare the effects of market volatilities on Lord Abbett and Nuveen California 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 Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Nuveen California.
Diversification Opportunities for Lord Abbett and Nuveen California
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and Nuveen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Nuveen California Amt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California Amt 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 Affiliated are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California Amt has no effect on the direction of Lord Abbett i.e., Lord Abbett and Nuveen California go up and down completely randomly.
Pair Corralation between Lord Abbett and Nuveen California
Assuming the 90 days horizon Lord Abbett Affiliated is expected to generate 0.95 times more return on investment than Nuveen California. However, Lord Abbett Affiliated is 1.05 times less risky than Nuveen California. It trades about 0.12 of its potential returns per unit of risk. Nuveen California Amt is currently generating about 0.06 per unit of risk. If you would invest 1,486 in Lord Abbett Affiliated on August 30, 2024 and sell it today you would earn a total of 619.00 from holding Lord Abbett Affiliated or generate 41.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Nuveen California Amt
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Nuveen California Amt |
Lord Abbett and Nuveen California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Nuveen California
The main advantage of trading using opposite Lord Abbett and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Nuveen California 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 Nuveen California will offset losses from the drop in Nuveen California's long position.| Lord Abbett vs. Kinetics Global Fund | Lord Abbett vs. Massmutual Premier Global | Lord Abbett vs. Scharf Global Opportunity | Lord Abbett vs. T Rowe Price |
| Nuveen California vs. BlackRock California Municipal | Nuveen California vs. Blackrock Muniyield Quality | Nuveen California vs. Blackrock Muni Intermediate | Nuveen California vs. Munivest 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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