Correlation Between Aig Government and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Aig Government 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 Aig Government and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Lord Abbett New, you can compare the effects of market volatilities on Aig Government 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 Aig Government with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Lord Abbett.
Diversification Opportunities for Aig Government and Lord Abbett
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aig and Lord is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Lord Abbett New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett New and Aig Government 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 Aig Government Money 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 New has no effect on the direction of Aig Government i.e., Aig Government and Lord Abbett go up and down completely randomly.
Pair Corralation between Aig Government and Lord Abbett
Assuming the 90 days horizon Aig Government is expected to generate 1.1 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Aig Government Money is 1.42 times less risky than Lord Abbett. It trades about 0.56 of its potential returns per unit of risk. Lord Abbett New is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,071 in Lord Abbett New on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Lord Abbett New or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Lord Abbett New
Performance |
| Timeline |
| Aig Government Money |
| Lord Abbett New |
Aig Government and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Lord Abbett
The main advantage of trading using opposite Aig Government and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government 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.| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
| Lord Abbett vs. Palm Valley Capital | Lord Abbett vs. Heartland Value Plus | Lord Abbett vs. Lord Abbett Small | Lord Abbett vs. Omni Small Cap Value |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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