Correlation Between Nationwide Highmark and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Nationwide Highmark 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 Nationwide Highmark and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Highmark Short and Lord Abbett Diversified, you can compare the effects of market volatilities on Nationwide Highmark 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 Nationwide Highmark with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Highmark and Lord Abbett.
Diversification Opportunities for Nationwide Highmark and Lord Abbett
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nationwide and Lord is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Highmark Short and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Nationwide Highmark 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 Nationwide Highmark Short 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 Diversified has no effect on the direction of Nationwide Highmark i.e., Nationwide Highmark and Lord Abbett go up and down completely randomly.
Pair Corralation between Nationwide Highmark and Lord Abbett
Assuming the 90 days horizon Nationwide Highmark is expected to generate 1.74 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Nationwide Highmark Short is 2.6 times less risky than Lord Abbett. It trades about 0.19 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Lord Abbett Diversified on September 12, 2024 and sell it today you would earn a total of 253.00 from holding Lord Abbett Diversified or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Highmark Short vs. Lord Abbett Diversified
Performance |
| Timeline |
| Nationwide Highmark Short |
| Lord Abbett Diversified |
Nationwide Highmark and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Highmark and Lord Abbett
The main advantage of trading using opposite Nationwide Highmark and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Highmark 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.| Nationwide Highmark vs. SCOR PK | Nationwide Highmark vs. Morningstar Unconstrained Allocation | Nationwide Highmark vs. Via Renewables | Nationwide Highmark vs. Bondbloxx ETF Trust |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |