Correlation Between Cref Inflation and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Cref Inflation 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 Cref Inflation and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Lord Abbett Convertible, you can compare the effects of market volatilities on Cref Inflation 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 Cref Inflation with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation and Lord Abbett.
Diversification Opportunities for Cref Inflation and Lord Abbett
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cref and Lord is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Cref Inflation 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 Cref Inflation Linked Bond 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 Convertible has no effect on the direction of Cref Inflation i.e., Cref Inflation and Lord Abbett go up and down completely randomly.
Pair Corralation between Cref Inflation and Lord Abbett
Assuming the 90 days trading horizon Cref Inflation is expected to generate 2.91 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Cref Inflation Linked Bond is 2.26 times less risky than Lord Abbett. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,206 in Lord Abbett Convertible on October 9, 2024 and sell it today you would earn a total of 245.00 from holding Lord Abbett Convertible or generate 20.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Lord Abbett Convertible
Performance |
| Timeline |
| Cref Inflation Linked |
| Lord Abbett Convertible |
Cref Inflation and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation and Lord Abbett
The main advantage of trading using opposite Cref Inflation and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation 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.| Cref Inflation vs. Guggenheim Managed Futures | Cref Inflation vs. Transamerica Inflation Opportunities | Cref Inflation vs. Ab Bond Inflation | Cref Inflation vs. Arrow Managed Futures |
| Lord Abbett vs. Cref Money Market | Lord Abbett vs. Ubs Money Series | Lord Abbett vs. Edward Jones Money | Lord Abbett vs. Prudential Government Money |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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