Correlation Between Pace Municipal and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Lord Abbett High, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Lord Abbett.
Diversification Opportunities for Pace Municipal and Lord Abbett
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pace and Lord is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Lord Abbett High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett High and Pace Municipal 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 Pace Municipal Fixed 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 High has no effect on the direction of Pace Municipal i.e., Pace Municipal and Lord Abbett go up and down completely randomly.
Pair Corralation between Pace Municipal and Lord Abbett
Assuming the 90 days horizon Pace Municipal is expected to generate 2.31 times less return on investment than Lord Abbett. In addition to that, Pace Municipal is 1.5 times more volatile than Lord Abbett High. It trades about 0.06 of its total potential returns per unit of risk. Lord Abbett High is currently generating about 0.2 per unit of volatility. If you would invest 642.00 in Lord Abbett High on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Lord Abbett High or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Lord Abbett High
Performance |
| Timeline |
| Pace Municipal Fixed |
| Lord Abbett High |
Pace Municipal and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Lord Abbett
The main advantage of trading using opposite Pace Municipal and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Shelton Emerging Markets | Pace Municipal vs. Ep Emerging Markets | Pace Municipal vs. Pace International Emerging | Pace Municipal vs. Western Assets Emerging |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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