Correlation Between Old Westbury and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Old Westbury 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 Old Westbury and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Large and Lord Abbett Trust, you can compare the effects of market volatilities on Old Westbury 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 Old Westbury with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Lord Abbett.
Diversification Opportunities for Old Westbury and Lord Abbett
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Lord is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Lord Abbett Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Trust and Old Westbury 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 Old Westbury Large 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 Trust has no effect on the direction of Old Westbury i.e., Old Westbury and Lord Abbett go up and down completely randomly.
Pair Corralation between Old Westbury and Lord Abbett
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.93 times more return on investment than Lord Abbett. However, Old Westbury Large is 1.08 times less risky than Lord Abbett. It trades about 0.09 of its potential returns per unit of risk. Lord Abbett Trust is currently generating about 0.06 per unit of risk. If you would invest 1,486 in Old Westbury Large on November 19, 2024 and sell it today you would earn a total of 586.00 from holding Old Westbury Large or generate 39.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Large vs. Lord Abbett Trust
Performance |
| Timeline |
| Old Westbury Large |
| Lord Abbett Trust |
Old Westbury and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Lord Abbett
The main advantage of trading using opposite Old Westbury and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury 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.| Old Westbury vs. Ab Global Real | Old Westbury vs. Ab Global Real | Old Westbury vs. Voya Real Estate | Old Westbury vs. Nexpoint Real Estate |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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