Correlation Between Templeton Emerging and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging 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 Templeton Emerging and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Emerging Markets and Lord Abbett Growth, you can compare the effects of market volatilities on Templeton Emerging 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 Templeton Emerging with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Lord Abbett.
Diversification Opportunities for Templeton Emerging and Lord Abbett
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Templeton and Lord is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets 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 Templeton Emerging 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 Templeton Emerging Markets 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 Templeton Emerging i.e., Templeton Emerging and Lord Abbett go up and down completely randomly.
Pair Corralation between Templeton Emerging and Lord Abbett
Assuming the 90 days horizon Templeton Emerging is expected to generate 3.12 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Templeton Emerging Markets is 2.01 times less risky than Lord Abbett. It trades about 0.07 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 2,587 in Lord Abbett Growth on September 12, 2024 and sell it today you would earn a total of 2,457 from holding Lord Abbett Growth or generate 94.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Lord Abbett Growth
Performance |
| Timeline |
| Templeton Emerging |
| Lord Abbett Growth |
Templeton Emerging and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Lord Abbett
The main advantage of trading using opposite Templeton Emerging and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging 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.| Templeton Emerging vs. Guidemark Smallmid Cap | Templeton Emerging vs. Siit Small Mid | Templeton Emerging vs. Mutual Of America | Templeton Emerging vs. Aqr Small Cap |
| Lord Abbett vs. Short Precious Metals | Lord Abbett vs. Europac Gold Fund | Lord Abbett vs. Oppenheimer Gold Special | Lord Abbett vs. Gamco Global Gold |
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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