Correlation Between Jennison Natural and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Lord Abbett Focused, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Lord Abbett.
Diversification Opportunities for Jennison Natural and Lord Abbett
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jennison and Lord is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources and Lord Abbett Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Focused and Jennison Natural 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 Jennison Natural Resources 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 Focused has no effect on the direction of Jennison Natural i.e., Jennison Natural and Lord Abbett go up and down completely randomly.
Pair Corralation between Jennison Natural and Lord Abbett
Assuming the 90 days horizon Jennison Natural is expected to generate 1.33 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Jennison Natural Resources is 1.04 times less risky than Lord Abbett. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Focused is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,701 in Lord Abbett Focused on September 4, 2024 and sell it today you would earn a total of 505.00 from holding Lord Abbett Focused or generate 18.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Lord Abbett Focused
Performance |
| Timeline |
| Jennison Natural Res |
| Lord Abbett Focused |
Jennison Natural and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Lord Abbett
The main advantage of trading using opposite Jennison Natural and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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.| Jennison Natural vs. Rbc Global Equity | Jennison Natural vs. The Hartford Equity | Jennison Natural vs. Small Cap Equity | Jennison Natural vs. The Fixed Income |
| Lord Abbett vs. Goehring Rozencwajg Resources | Lord Abbett vs. Oil Gas Ultrasector | Lord Abbett vs. Salient Mlp Energy | Lord Abbett vs. Jennison Natural Resources |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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