Correlation Between Federated Ohio and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Federated Ohio 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 Federated Ohio and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Lord Abbett Convertible, you can compare the effects of market volatilities on Federated Ohio 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 Federated Ohio with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Lord Abbett.
Diversification Opportunities for Federated Ohio and Lord Abbett
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEDERATED and Lord is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Federated Ohio 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 Federated Ohio Municipal 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 Convertible has no effect on the direction of Federated Ohio i.e., Federated Ohio and Lord Abbett go up and down completely randomly.
Pair Corralation between Federated Ohio and Lord Abbett
Assuming the 90 days horizon Federated Ohio is expected to generate 7.25 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Federated Ohio Municipal is 1.85 times less risky than Lord Abbett. It trades about 0.17 of its potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.65 of returns per unit of risk over similar time horizon. If you would invest 1,383 in Lord Abbett Convertible on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Lord Abbett Convertible or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Lord Abbett Convertible
Performance |
| Timeline |
| Federated Ohio Municipal |
| Lord Abbett Convertible |
Federated Ohio and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Lord Abbett
The main advantage of trading using opposite Federated Ohio and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio 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.| Federated Ohio vs. Federated Emerging Market | Federated Ohio vs. Federated Mdt All | Federated Ohio vs. Federated Mdt Balanced | Federated Ohio vs. Federated Global Allocation |
| Lord Abbett vs. Ab Bond Inflation | Lord Abbett vs. Nuveen Arizona Municipal | Lord Abbett vs. Federated Ohio Municipal | Lord Abbett vs. Oklahoma 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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