Correlation Between Aqr Diversified and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified 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 Diversified 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 Diversified Arbitrage and Lord Abbett Small, you can compare the effects of market volatilities on Aqr Diversified 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 Diversified with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Lord Abbett.
Diversification Opportunities for Aqr Diversified and Lord Abbett
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Lord is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and Aqr Diversified 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 Diversified Arbitrage 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 Small has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Lord Abbett go up and down completely randomly.
Pair Corralation between Aqr Diversified and Lord Abbett
Assuming the 90 days horizon Aqr Diversified is expected to generate 2.31 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Aqr Diversified Arbitrage is 10.4 times less risky than Lord Abbett. It trades about 0.14 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,937 in Lord Abbett Small on November 8, 2024 and sell it today you would earn a total of 243.00 from holding Lord Abbett Small or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Lord Abbett Small
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Lord Abbett Small |
Aqr Diversified and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Lord Abbett
The main advantage of trading using opposite Aqr Diversified and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified 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 Diversified vs. Putnam Global Health | Aqr Diversified vs. Blackrock Health Sciences | Aqr Diversified vs. The Gabelli Healthcare | Aqr Diversified vs. Tekla Healthcare Investors |
| Lord Abbett vs. Baillie Gifford Health | Lord Abbett vs. Eaton Vance Worldwide | Lord Abbett vs. The Gabelli Healthcare | Lord Abbett vs. Vanguard Health Care |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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