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 Intermediate, 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
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and Lord is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Lord Abbett Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Intermediate 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 Intermediate 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 2.74 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Old Westbury Municipal is 1.15 times less risky than Lord Abbett. It trades about 0.04 of its potential returns per unit of risk. Lord Abbett Intermediate is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 984.00 in Lord Abbett Intermediate on November 3, 2024 and sell it today you would earn a total of 39.00 from holding Lord Abbett Intermediate or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Lord Abbett Intermediate
Performance |
| Timeline |
| Old Westbury Municipal |
| Lord Abbett Intermediate |
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. Fidelity Advisor Technology | Old Westbury vs. Dreyfus Technology Growth | Old Westbury vs. Blackrock Science Technology | Old Westbury vs. Firsthand Technology Opportunities |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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