Correlation Between Commodities Strategy and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Commodities 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 Commodities 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 Commodities Strategy Fund and Lord Abbett Growth, you can compare the effects of market volatilities on Commodities 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 Commodities Strategy with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Lord Abbett.
Diversification Opportunities for Commodities Strategy and Lord Abbett
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commodities and Lord is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Commodities 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 Commodities 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 Growth has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Lord Abbett go up and down completely randomly.
Pair Corralation between Commodities Strategy and Lord Abbett
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 0.58 times more return on investment than Lord Abbett. However, Commodities Strategy Fund is 1.74 times less risky than Lord Abbett. It trades about 0.1 of its potential returns per unit of risk. Lord Abbett Growth is currently generating about -0.03 per unit of risk. If you would invest 2,894 in Commodities Strategy Fund on September 12, 2024 and sell it today you would earn a total of 44.00 from holding Commodities Strategy Fund or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Lord Abbett Growth
Performance |
| Timeline |
| Commodities Strategy |
| Lord Abbett Growth |
Commodities Strategy and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Lord Abbett
The main advantage of trading using opposite Commodities Strategy and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities 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.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Lord Abbett vs. Jennison Natural Resources | Lord Abbett vs. Hennessy Bp Energy | Lord Abbett vs. Fidelity Advisor Energy | Lord Abbett vs. Icon Natural Resources |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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