Correlation Between Total Return and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Total Return 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 Total Return and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Fund and Lord Abbett Core, you can compare the effects of market volatilities on Total Return 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 Total Return with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Lord Abbett.
Diversification Opportunities for Total Return and Lord Abbett
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Total and Lord is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund and Lord Abbett Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Core and Total Return 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 Total Return Fund 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 Core has no effect on the direction of Total Return i.e., Total Return and Lord Abbett go up and down completely randomly.
Pair Corralation between Total Return and Lord Abbett
Assuming the 90 days horizon Total Return Fund is expected to generate 1.18 times more return on investment than Lord Abbett. However, Total Return is 1.18 times more volatile than Lord Abbett Core. It trades about 0.16 of its potential returns per unit of risk. Lord Abbett Core is currently generating about 0.11 per unit of risk. If you would invest 856.00 in Total Return Fund on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Total Return Fund or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Return Fund vs. Lord Abbett Core
Performance |
| Timeline |
| Total Return |
| Lord Abbett Core |
Total Return and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Lord Abbett
The main advantage of trading using opposite Total Return and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return 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.| Total Return vs. Pimco Rae Worldwide | Total Return vs. Pimco Rae Worldwide | Total Return vs. Pimco Rae Worldwide | Total Return vs. Pimco Rae Worldwide |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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