Correlation Between Dimensional Retirement and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Dimensional Retirement 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 Dimensional Retirement and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Retirement Income and Lord Abbett Short, you can compare the effects of market volatilities on Dimensional Retirement 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 Dimensional Retirement with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Retirement and Lord Abbett.
Diversification Opportunities for Dimensional Retirement and Lord Abbett
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dimensional and Lord is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Retirement Income and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Dimensional Retirement 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 Dimensional Retirement Income 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 Short has no effect on the direction of Dimensional Retirement i.e., Dimensional Retirement and Lord Abbett go up and down completely randomly.
Pair Corralation between Dimensional Retirement and Lord Abbett
Assuming the 90 days horizon Dimensional Retirement Income is expected to generate 1.27 times more return on investment than Lord Abbett. However, Dimensional Retirement is 1.27 times more volatile than Lord Abbett Short. It trades about 0.14 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.15 per unit of risk. If you would invest 1,121 in Dimensional Retirement Income on September 14, 2024 and sell it today you would earn a total of 42.00 from holding Dimensional Retirement Income or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional Retirement Income vs. Lord Abbett Short
Performance |
| Timeline |
| Dimensional Retirement |
| Lord Abbett Short |
Dimensional Retirement and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Retirement and Lord Abbett
The main advantage of trading using opposite Dimensional Retirement and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Retirement 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.| Dimensional Retirement vs. Old Westbury Large | Dimensional Retirement vs. Pace Large Growth | Dimensional Retirement vs. T Rowe Price | Dimensional Retirement vs. Fisher Large Cap |
| Lord Abbett vs. Blackrock Financial Institutions | Lord Abbett vs. Royce Global Financial | Lord Abbett vs. Angel Oak Financial | Lord Abbett vs. Vanguard Financials Index |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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