Correlation Between Sit Minnesota and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Sit Minnesota 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 Sit Minnesota and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Minnesota Tax Free and Lord Abbett Convertible, you can compare the effects of market volatilities on Sit Minnesota 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 Sit Minnesota with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Minnesota and Lord Abbett.
Diversification Opportunities for Sit Minnesota and Lord Abbett
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sit and Lord is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sit Minnesota Tax Free and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Sit Minnesota 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 Sit Minnesota Tax Free 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 Convertible has no effect on the direction of Sit Minnesota i.e., Sit Minnesota and Lord Abbett go up and down completely randomly.
Pair Corralation between Sit Minnesota and Lord Abbett
Assuming the 90 days horizon Sit Minnesota is expected to generate 2.62 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Sit Minnesota Tax Free is 2.32 times less risky than Lord Abbett. It trades about 0.07 of its potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,205 in Lord Abbett Convertible on September 3, 2024 and sell it today you would earn a total of 282.00 from holding Lord Abbett Convertible or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Minnesota Tax Free vs. Lord Abbett Convertible
Performance |
| Timeline |
| Sit Minnesota Tax |
| Lord Abbett Convertible |
Sit Minnesota and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Minnesota and Lord Abbett
The main advantage of trading using opposite Sit Minnesota and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Minnesota 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.| Sit Minnesota vs. T Rowe Price | Sit Minnesota vs. Hood River New | Sit Minnesota vs. T Rowe Price | Sit Minnesota vs. Franklin Lifesmart 2050 |
| Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Allianzgi Vertible 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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