Correlation Between Nasdaq 100 and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Lord Abbett Income, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Lord Abbett.
Diversification Opportunities for Nasdaq 100 and Lord Abbett
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq and Lord is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Lord Abbett Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Income and Nasdaq 100 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 Nasdaq 100 2x Strategy 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 Income has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Lord Abbett go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Lord Abbett
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 4.19 times more return on investment than Lord Abbett. However, Nasdaq 100 is 4.19 times more volatile than Lord Abbett Income. It trades about 0.28 of its potential returns per unit of risk. Lord Abbett Income is currently generating about 0.13 per unit of risk. If you would invest 38,210 in Nasdaq 100 2x Strategy on September 5, 2024 and sell it today you would earn a total of 4,693 from holding Nasdaq 100 2x Strategy or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Lord Abbett Income
Performance |
| Timeline |
| Nasdaq 100 2x |
| Lord Abbett Income |
Nasdaq 100 and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Lord Abbett
The main advantage of trading using opposite Nasdaq 100 and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Gabelli Gold Fund | Nasdaq 100 vs. Precious Metals And | Nasdaq 100 vs. Vy Goldman Sachs | Nasdaq 100 vs. James Balanced Golden |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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