Correlation Between Banking Fund and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Banking Fund 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 Banking Fund and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banking Fund Class and Lord Abbett Intermediate, you can compare the effects of market volatilities on Banking Fund 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 Banking Fund with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banking Fund and Lord Abbett.
Diversification Opportunities for Banking Fund and Lord Abbett
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banking and Lord is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Banking Fund Class and Lord Abbett Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Intermediate and Banking Fund 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 Banking Fund Class 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 Intermediate has no effect on the direction of Banking Fund i.e., Banking Fund and Lord Abbett go up and down completely randomly.
Pair Corralation between Banking Fund and Lord Abbett
Assuming the 90 days horizon Banking Fund Class is expected to generate 7.44 times more return on investment than Lord Abbett. However, Banking Fund is 7.44 times more volatile than Lord Abbett Intermediate. It trades about 0.31 of its potential returns per unit of risk. Lord Abbett Intermediate is currently generating about 0.06 per unit of risk. If you would invest 7,416 in Banking Fund Class on November 3, 2024 and sell it today you would earn a total of 576.00 from holding Banking Fund Class or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banking Fund Class vs. Lord Abbett Intermediate
Performance |
| Timeline |
| Banking Fund Class |
| Lord Abbett Intermediate |
Banking Fund and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banking Fund and Lord Abbett
The main advantage of trading using opposite Banking Fund and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banking Fund 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.| Banking Fund vs. Valic Company I | Banking Fund vs. Fidelity Small Cap | Banking Fund vs. Vanguard Small Cap Value | Banking Fund vs. William Blair Small |
| Lord Abbett vs. Franklin Lifesmart Retirement | Lord Abbett vs. Great West Moderately Aggressive | Lord Abbett vs. Tiaa Cref Lifestyle Moderate | Lord Abbett vs. Tiaa Cref Lifecycle Retirement |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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