Correlation Between Lord Abbett and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aquila Tax-free 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 Aquila Tax-free 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 Aquila Tax Free Fund, you can compare the effects of market volatilities on Lord Abbett and Aquila Tax-free 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 Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aquila Tax-free.
Diversification Opportunities for Lord Abbett and Aquila Tax-free
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Aquila is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Aquila Tax Free Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free 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 Aquila Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aquila Tax-free go up and down completely randomly.
Pair Corralation between Lord Abbett and Aquila Tax-free
Assuming the 90 days horizon Lord Abbett Affiliated is expected to generate 4.76 times more return on investment than Aquila Tax-free. However, Lord Abbett is 4.76 times more volatile than Aquila Tax Free Fund. It trades about 0.05 of its potential returns per unit of risk. Aquila Tax Free Fund is currently generating about 0.17 per unit of risk. If you would invest 1,995 in Lord Abbett Affiliated on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Lord Abbett Affiliated or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Aquila Tax Free Fund
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Aquila Tax Free |
Lord Abbett and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aquila Tax-free
The main advantage of trading using opposite Lord Abbett and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aquila Tax-free 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.| Lord Abbett vs. Science Technology Fund | Lord Abbett vs. Janus Global Technology | Lord Abbett vs. Hennessy Technology Fund | Lord Abbett vs. Goldman Sachs Technology |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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