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 Municipal and Lord Abbett Alpha, 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
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Lord is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal 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 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 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 Alpha 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 is expected to generate 8.2 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Old Westbury Municipal is 5.97 times less risky than Lord Abbett. It trades about 0.21 of its potential returns per unit of risk. Lord Abbett Alpha is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,610 in Lord Abbett Alpha on September 3, 2024 and sell it today you would earn a total of 189.00 from holding Lord Abbett Alpha or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Lord Abbett Alpha
Performance |
| Timeline |
| Old Westbury Municipal |
| Lord Abbett Alpha |
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. Legg Mason Partners | Old Westbury vs. Black Oak Emerging | Old Westbury vs. Transamerica Emerging Markets | Old Westbury vs. T Rowe Price |
| Lord Abbett vs. Ms Global Fixed | Lord Abbett vs. Rationalpier 88 Convertible | Lord Abbett vs. Dreyfusstandish Global Fixed | 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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