Correlation Between Siit High and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Siit High 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 Siit High and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and Lord Abbett Bond, you can compare the effects of market volatilities on Siit High 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 Siit High with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Lord Abbett.
Diversification Opportunities for Siit High and Lord Abbett
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siit and Lord is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Siit High 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 Siit High Yield 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 Bond has no effect on the direction of Siit High i.e., Siit High and Lord Abbett go up and down completely randomly.
Pair Corralation between Siit High and Lord Abbett
Assuming the 90 days horizon Siit High is expected to generate 2.33 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Siit High Yield is 1.62 times less risky than Lord Abbett. It trades about 0.15 of its potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 714.00 in Lord Abbett Bond on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Lord Abbett Bond or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Lord Abbett Bond
Performance |
| Timeline |
| Siit High Yield |
| Lord Abbett Bond |
Siit High and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Lord Abbett
The main advantage of trading using opposite Siit High and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High 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.| Siit High vs. Lord Abbett Emerging | Siit High vs. Dws Government Money | Siit High vs. Matson Money Equity | Siit High vs. Ashmore Emerging Markets |
| Lord Abbett vs. Gmo High Yield | Lord Abbett vs. Calvert High Yield | Lord Abbett vs. Siit High Yield | Lord Abbett vs. Artisan High Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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