Correlation Between Lord Abbett and Short-term Fund
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Short-term Fund 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 Short-term Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Ultra and Short Term Fund R, you can compare the effects of market volatilities on Lord Abbett and Short-term Fund 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 Short-term Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Short-term Fund.
Diversification Opportunities for Lord Abbett and Short-term Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Short-term is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Ultra and Short Term Fund R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Fund 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 Ultra are associated (or correlated) with Short-term Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and Short-term Fund go up and down completely randomly.
Pair Corralation between Lord Abbett and Short-term Fund
Assuming the 90 days horizon Lord Abbett Ultra is expected to generate 1.14 times more return on investment than Short-term Fund. However, Lord Abbett is 1.14 times more volatile than Short Term Fund R. It trades about 0.25 of its potential returns per unit of risk. Short Term Fund R is currently generating about 0.24 per unit of risk. If you would invest 882.00 in Lord Abbett Ultra on November 4, 2024 and sell it today you would earn a total of 121.00 from holding Lord Abbett Ultra or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Ultra vs. Short Term Fund R
Performance |
| Timeline |
| Lord Abbett Ultra |
| Short Term Fund |
Lord Abbett and Short-term Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Short-term Fund
The main advantage of trading using opposite Lord Abbett and Short-term Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Short-term Fund 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 Short-term Fund will offset losses from the drop in Short-term Fund's long position.| Lord Abbett vs. Red Oak Technology | Lord Abbett vs. Icon Information Technology | Lord Abbett vs. Global Technology Portfolio | Lord Abbett vs. Fidelity Advisor Technology |
| Short-term Fund vs. Salient Mlp Energy | Short-term Fund vs. Hennessy Bp Energy | Short-term Fund vs. Ivy Natural Resources | Short-term Fund vs. Franklin Natural Resources |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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