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 Small, 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
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commodities and Lord is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund 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 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 Small 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 is expected to generate 1.19 times less return on investment than Lord Abbett. In addition to that, Commodities Strategy is 1.02 times more volatile than Lord Abbett Small. It trades about 0.12 of its total potential returns per unit of risk. Lord Abbett Small is currently generating about 0.15 per unit of volatility. If you would invest 2,126 in Lord Abbett Small on November 5, 2024 and sell it today you would earn a total of 57.00 from holding Lord Abbett Small or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Lord Abbett Small
Performance |
| Timeline |
| Commodities Strategy |
| Lord Abbett Small |
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. Ashmore Emerging Markets | Lord Abbett vs. Balanced Strategy Fund | Lord Abbett vs. Morgan Stanley Emerging | Lord Abbett vs. Growth Strategy 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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