Correlation Between Aqr Large and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Aqr Large 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 Aqr Large and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Lord Abbett Trust, you can compare the effects of market volatilities on Aqr Large 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 Aqr Large with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Lord Abbett.
Diversification Opportunities for Aqr Large and Lord Abbett
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AQR and Lord is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Lord Abbett Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Trust and Aqr Large 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 Aqr Large Cap 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 Trust has no effect on the direction of Aqr Large i.e., Aqr Large and Lord Abbett go up and down completely randomly.
Pair Corralation between Aqr Large and Lord Abbett
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.13 times more return on investment than Lord Abbett. However, Aqr Large is 1.13 times more volatile than Lord Abbett Trust. It trades about 0.23 of its potential returns per unit of risk. Lord Abbett Trust is currently generating about -0.18 per unit of risk. If you would invest 2,057 in Aqr Large Cap on August 26, 2024 and sell it today you would earn a total of 99.00 from holding Aqr Large Cap or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Lord Abbett Trust
Performance |
| Timeline |
| Aqr Large Cap |
| Lord Abbett Trust |
Aqr Large and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Lord Abbett
The main advantage of trading using opposite Aqr Large and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large 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.| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
| Lord Abbett vs. Nuveen Winslow Large Cap | Lord Abbett vs. Siit Large Cap | Lord Abbett vs. Old Westbury Large | Lord Abbett vs. Aqr Large Cap |
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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