Correlation Between Plumb Balanced and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Plumb Balanced 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 Plumb Balanced and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plumb Balanced and Lord Abbett Small, you can compare the effects of market volatilities on Plumb Balanced 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 Plumb Balanced with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plumb Balanced and Lord Abbett.
Diversification Opportunities for Plumb Balanced and Lord Abbett
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plumb and Lord is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Plumb Balanced and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and Plumb Balanced 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 Plumb Balanced 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 Small has no effect on the direction of Plumb Balanced i.e., Plumb Balanced and Lord Abbett go up and down completely randomly.
Pair Corralation between Plumb Balanced and Lord Abbett
Assuming the 90 days horizon Plumb Balanced is expected to generate 0.6 times more return on investment than Lord Abbett. However, Plumb Balanced is 1.66 times less risky than Lord Abbett. It trades about 0.12 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.07 per unit of risk. If you would invest 2,729 in Plumb Balanced on September 13, 2024 and sell it today you would earn a total of 1,391 from holding Plumb Balanced or generate 50.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Plumb Balanced vs. Lord Abbett Small
Performance |
| Timeline |
| Plumb Balanced |
| Lord Abbett Small |
Plumb Balanced and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plumb Balanced and Lord Abbett
The main advantage of trading using opposite Plumb Balanced and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plumb Balanced 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.| Plumb Balanced vs. Advent Claymore Convertible | Plumb Balanced vs. Lord Abbett Convertible | Plumb Balanced vs. Absolute Convertible Arbitrage | Plumb Balanced vs. Gabelli Convertible And |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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