Correlation Between Small-midcap Dividend and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Small-midcap Dividend 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 Small-midcap Dividend and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Midcap Dividend Income and Lord Abbett Bond, you can compare the effects of market volatilities on Small-midcap Dividend 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 Small-midcap Dividend with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small-midcap Dividend and Lord Abbett.
Diversification Opportunities for Small-midcap Dividend and Lord Abbett
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Small-midcap and Lord is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Small Midcap Dividend Income and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Small-midcap Dividend 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 Small Midcap Dividend Income 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 Bond has no effect on the direction of Small-midcap Dividend i.e., Small-midcap Dividend and Lord Abbett go up and down completely randomly.
Pair Corralation between Small-midcap Dividend and Lord Abbett
Assuming the 90 days horizon Small Midcap Dividend Income is expected to generate 5.72 times more return on investment than Lord Abbett. However, Small-midcap Dividend is 5.72 times more volatile than Lord Abbett Bond. It trades about 0.27 of its potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.2 per unit of risk. If you would invest 1,919 in Small Midcap Dividend Income on August 30, 2024 and sell it today you would earn a total of 138.00 from holding Small Midcap Dividend Income or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Small Midcap Dividend Income vs. Lord Abbett Bond
Performance |
| Timeline |
| Small Midcap Dividend |
| Lord Abbett Bond |
Small-midcap Dividend and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small-midcap Dividend and Lord Abbett
The main advantage of trading using opposite Small-midcap Dividend and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small-midcap Dividend 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.The idea behind Small Midcap Dividend Income and Lord Abbett Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Lord Abbett vs. Champlain Mid Cap | Lord Abbett vs. Eip Growth And | Lord Abbett vs. Kinetics Small Cap | Lord Abbett vs. Small Midcap Dividend Income |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |