Correlation Between Sierra E and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Sierra E 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 Sierra E and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra E Retirement and Lord Abbett Growth, you can compare the effects of market volatilities on Sierra E 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 Sierra E with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra E and Lord Abbett.
Diversification Opportunities for Sierra E and Lord Abbett
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sierra and Lord is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sierra E Retirement 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 Sierra E 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 Sierra E Retirement 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 Sierra E i.e., Sierra E and Lord Abbett go up and down completely randomly.
Pair Corralation between Sierra E and Lord Abbett
Assuming the 90 days horizon Sierra E is expected to generate 2.74 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Sierra E Retirement is 5.85 times less risky than Lord Abbett. It trades about 0.24 of its potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,772 in Lord Abbett Growth on September 15, 2024 and sell it today you would earn a total of 86.00 from holding Lord Abbett Growth or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sierra E Retirement vs. Lord Abbett Growth
Performance |
| Timeline |
| Sierra E Retirement |
| Lord Abbett Growth |
Sierra E and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra E and Lord Abbett
The main advantage of trading using opposite Sierra E and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra E 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.| Sierra E vs. Sierra Tactical Risk | Sierra E vs. Sierra Strategic Income | Sierra E vs. Sierra Strategic Income | Sierra E vs. Sierra Strategic Income |
| Lord Abbett vs. Qs Moderate Growth | Lord Abbett vs. Wilmington Trust Retirement | Lord Abbett vs. Sierra E Retirement | Lord Abbett vs. Calvert Moderate Allocation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |