Correlation Between Nuveen Santa and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Nuveen Santa 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 Nuveen Santa and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Santa Barbara and Lord Abbett Health, you can compare the effects of market volatilities on Nuveen Santa 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 Nuveen Santa with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Santa and Lord Abbett.
Diversification Opportunities for Nuveen Santa and Lord Abbett
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Lord is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Santa Barbara and Lord Abbett Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Health and Nuveen Santa 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 Nuveen Santa Barbara 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 Health has no effect on the direction of Nuveen Santa i.e., Nuveen Santa and Lord Abbett go up and down completely randomly.
Pair Corralation between Nuveen Santa and Lord Abbett
Assuming the 90 days horizon Nuveen Santa Barbara is expected to under-perform the Lord Abbett. In addition to that, Nuveen Santa is 1.4 times more volatile than Lord Abbett Health. It trades about -0.29 of its total potential returns per unit of risk. Lord Abbett Health is currently generating about -0.28 per unit of volatility. If you would invest 1,979 in Lord Abbett Health on October 7, 2024 and sell it today you would lose (107.00) from holding Lord Abbett Health or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Santa Barbara vs. Lord Abbett Health
Performance |
| Timeline |
| Nuveen Santa Barbara |
| Lord Abbett Health |
Nuveen Santa and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Santa and Lord Abbett
The main advantage of trading using opposite Nuveen Santa and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Santa 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.| Nuveen Santa vs. Multi Manager High Yield | Nuveen Santa vs. Virtus High Yield | Nuveen Santa vs. Dunham High Yield | Nuveen Santa vs. Ab High Income |
| Lord Abbett vs. Vanguard Health Care | Lord Abbett vs. Vanguard Health Care | Lord Abbett vs. T Rowe Price | Lord Abbett vs. T Rowe Price |
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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