Correlation Between Muzinich and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Muzinich and Lord Abbett 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 Muzinich and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muzinich High Yield and Lord Abbett Emerging, you can compare the effects of market volatilities on Muzinich and Lord Abbett 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 Muzinich with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muzinich and Lord Abbett.
Diversification Opportunities for Muzinich and Lord Abbett
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Muzinich and Lord is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Muzinich High Yield and Lord Abbett Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Emerging and Muzinich 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 Muzinich High Yield are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Emerging has no effect on the direction of Muzinich i.e., Muzinich and Lord Abbett go up and down completely randomly.
Pair Corralation between Muzinich and Lord Abbett
Assuming the 90 days horizon Muzinich is expected to generate 1.33 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Muzinich High Yield is 1.96 times less risky than Lord Abbett. It trades about 0.21 of its potential returns per unit of risk. Lord Abbett Emerging is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 423.00 in Lord Abbett Emerging on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Lord Abbett Emerging or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Muzinich High Yield vs. Lord Abbett Emerging
Performance |
| Timeline |
| Muzinich High Yield |
| Lord Abbett Emerging |
Muzinich and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muzinich and Lord Abbett
The main advantage of trading using opposite Muzinich and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muzinich position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Muzinich vs. Muzinich Credit Opportunities | Muzinich vs. Muzinich Credit Opportunities | Muzinich vs. Muzinich High Yield | Muzinich vs. Muzinich Low Duration |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Floating Rate Fund | Lord Abbett vs. Floating Rate 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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