Correlation Between Prudential Jennison and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison 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 Prudential Jennison and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Financial and Lord Abbett Growth, you can compare the effects of market volatilities on Prudential Jennison 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 Prudential Jennison with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Lord Abbett.
Diversification Opportunities for Prudential Jennison and Lord Abbett
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and Lord is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Prudential Jennison 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 Prudential Jennison Financial 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 Growth has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Lord Abbett go up and down completely randomly.
Pair Corralation between Prudential Jennison and Lord Abbett
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 1.16 times more return on investment than Lord Abbett. However, Prudential Jennison is 1.16 times more volatile than Lord Abbett Growth. It trades about 0.25 of its potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.26 per unit of risk. If you would invest 2,527 in Prudential Jennison Financial on August 31, 2024 and sell it today you would earn a total of 226.00 from holding Prudential Jennison Financial or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Lord Abbett Growth
Performance |
| Timeline |
| Prudential Jennison |
| Lord Abbett Growth |
Prudential Jennison and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Lord Abbett
The main advantage of trading using opposite Prudential Jennison and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison 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.| Prudential Jennison vs. Putnam Convertible Incm Gwth | Prudential Jennison vs. Advent Claymore Convertible | Prudential Jennison vs. Virtus Convertible | Prudential Jennison vs. The Gamco Global |
| Lord Abbett vs. California High Yield Municipal | Lord Abbett vs. Ab Impact Municipal | Lord Abbett vs. Ishares Municipal Bond | Lord Abbett vs. Nuveen Arizona Municipal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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