Correlation Between Lord Abbett and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Pear Tree 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 Pear Tree 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 Pear Tree Polaris, you can compare the effects of market volatilities on Lord Abbett and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Pear Tree.
Diversification Opportunities for Lord Abbett and Pear Tree
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lord and Pear is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Lord Abbett i.e., Lord Abbett and Pear Tree go up and down completely randomly.
Pair Corralation between Lord Abbett and Pear Tree
Assuming the 90 days horizon Lord Abbett Affiliated is expected to generate 0.86 times more return on investment than Pear Tree. However, Lord Abbett Affiliated is 1.17 times less risky than Pear Tree. It trades about 0.09 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about 0.05 per unit of risk. If you would invest 1,528 in Lord Abbett Affiliated on August 27, 2024 and sell it today you would earn a total of 563.00 from holding Lord Abbett Affiliated or generate 36.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Pear Tree Polaris
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Pear Tree Polaris |
Lord Abbett and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Pear Tree
The main advantage of trading using opposite Lord Abbett and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Lord Abbett vs. Vanguard Strategic Small Cap | Lord Abbett vs. Qs Large Cap | Lord Abbett vs. Auer Growth Fund | Lord Abbett vs. Rbb Fund |
| Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Artisan International Value | Pear Tree vs. Rondure New World |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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