Correlation Between Nebraska Municipal and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal 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 Nebraska Municipal and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Lord Abbett Alpha, you can compare the effects of market volatilities on Nebraska Municipal 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 Nebraska Municipal with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Lord Abbett.
Diversification Opportunities for Nebraska Municipal and Lord Abbett
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEBRASKA and Lord is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Lord Abbett Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Alpha and Nebraska Municipal 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 Nebraska Municipal Fund 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 Alpha has no effect on the direction of Nebraska Municipal i.e., Nebraska Municipal and Lord Abbett go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Lord Abbett
Assuming the 90 days horizon Nebraska Municipal is expected to generate 4.39 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Nebraska Municipal Fund is 3.28 times less risky than Lord Abbett. It trades about 0.18 of its potential returns per unit of risk. Lord Abbett Alpha is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,736 in Lord Abbett Alpha on August 29, 2024 and sell it today you would earn a total of 183.00 from holding Lord Abbett Alpha or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Lord Abbett Alpha
Performance |
| Timeline |
| Nebraska Municipal |
| Lord Abbett Alpha |
Nebraska Municipal and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Lord Abbett
The main advantage of trading using opposite Nebraska Municipal and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal 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.| Nebraska Municipal vs. Colorado Bondshares A | Nebraska Municipal vs. Virginia Bond Fund | Nebraska Municipal vs. HUMANA INC | Nebraska Municipal vs. Aquagold International |
| Lord Abbett vs. Federated Government Ultrashort | Lord Abbett vs. California High Yield Municipal | Lord Abbett vs. Nuveen Massachusetts Municipal | Lord Abbett vs. Nebraska Municipal 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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