Correlation Between Columbia Convertible and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible 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 Columbia Convertible and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Convertible Securities and Lord Abbett Affiliated, you can compare the effects of market volatilities on Columbia Convertible 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 Columbia Convertible with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Lord Abbett.
Diversification Opportunities for Columbia Convertible and Lord Abbett
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and Lord is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Convertible Securitie and Lord Abbett Affiliated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Affiliated and Columbia Convertible 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 Columbia Convertible Securities 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 Affiliated has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Lord Abbett go up and down completely randomly.
Pair Corralation between Columbia Convertible and Lord Abbett
Assuming the 90 days horizon Columbia Convertible is expected to generate 1.16 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Columbia Convertible Securities is 1.41 times less risky than Lord Abbett. It trades about 0.12 of its potential returns per unit of risk. Lord Abbett Affiliated is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,784 in Lord Abbett Affiliated on November 3, 2024 and sell it today you would earn a total of 186.00 from holding Lord Abbett Affiliated or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.32% |
| Values | Daily Returns |
Columbia Convertible Securitie vs. Lord Abbett Affiliated
Performance |
| Timeline |
| Columbia Convertible |
| Lord Abbett Affiliated |
Columbia Convertible and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Lord Abbett
The main advantage of trading using opposite Columbia Convertible and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible 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.| Columbia Convertible vs. Guggenheim Managed Futures | Columbia Convertible vs. Ab Bond Inflation | Columbia Convertible vs. Atac Inflation Rotation | Columbia Convertible vs. Cref Inflation Linked Bond |
| Lord Abbett vs. Artisan High Income | Lord Abbett vs. Gmo High Yield | Lord Abbett vs. Pace High Yield | Lord Abbett vs. Barings High Yield |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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