Correlation Between Jpmorgan Smartretirement and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement 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 Jpmorgan Smartretirement and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Smartretirement 2035 and Lord Abbett Small, you can compare the effects of market volatilities on Jpmorgan Smartretirement 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 Jpmorgan Smartretirement with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Lord Abbett.
Diversification Opportunities for Jpmorgan Smartretirement and Lord Abbett
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jpmorgan and Lord is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2035 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 Jpmorgan Smartretirement 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 Jpmorgan Smartretirement 2035 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 Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Lord Abbett go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement and Lord Abbett
Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 1.02 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Jpmorgan Smartretirement 2035 is 2.0 times less risky than Lord Abbett. It trades about 0.09 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Lord Abbett Small on September 23, 2024 and sell it today you would earn a total of 443.00 from holding Lord Abbett Small or generate 26.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Smartretirement 2035 vs. Lord Abbett Small
Performance |
| Timeline |
| Jpmorgan Smartretirement |
| Lord Abbett Small |
Jpmorgan Smartretirement and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement and Lord Abbett
The main advantage of trading using opposite Jpmorgan Smartretirement and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement 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.The idea behind Jpmorgan Smartretirement 2035 and Lord Abbett Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Lord Abbett vs. Falcon Focus Scv | Lord Abbett vs. Western Asset Municipal | Lord Abbett vs. Materials Portfolio Fidelity | Lord Abbett vs. Leggmason Partners Institutional |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |