Correlation Between Balanced Strategy and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Balanced Strategy 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 Balanced Strategy and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Strategy Fund and Lord Abbett Inflation, you can compare the effects of market volatilities on Balanced Strategy 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 Balanced Strategy with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Lord Abbett.
Diversification Opportunities for Balanced Strategy and Lord Abbett
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Lord is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Lord Abbett Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Inflation and Balanced Strategy 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 Balanced Strategy 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 Inflation has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Lord Abbett go up and down completely randomly.
Pair Corralation between Balanced Strategy and Lord Abbett
Assuming the 90 days horizon Balanced Strategy Fund is expected to under-perform the Lord Abbett. In addition to that, Balanced Strategy is 5.45 times more volatile than Lord Abbett Inflation. It trades about -0.23 of its total potential returns per unit of risk. Lord Abbett Inflation is currently generating about -0.24 per unit of volatility. If you would invest 1,164 in Lord Abbett Inflation on October 9, 2024 and sell it today you would lose (6.00) from holding Lord Abbett Inflation or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Strategy Fund vs. Lord Abbett Inflation
Performance |
| Timeline |
| Balanced Strategy |
| Lord Abbett Inflation |
Balanced Strategy and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Strategy and Lord Abbett
The main advantage of trading using opposite Balanced Strategy and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy 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.| Balanced Strategy vs. Catalystmillburn Hedge Strategy | Balanced Strategy vs. Black Oak Emerging | Balanced Strategy vs. Western Assets Emerging | Balanced Strategy vs. Nasdaq 100 2x Strategy |
| Lord Abbett vs. Short Real Estate | Lord Abbett vs. Amg Managers Centersquare | Lord Abbett vs. Simt Real Estate | Lord Abbett vs. Tiaa Cref Real Estate |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |