Correlation Between Maryland Tax-free and L Abbett
Can any of the company-specific risk be diversified away by investing in both Maryland Tax-free and L 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 Maryland Tax-free and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maryland Tax Free Bond and L Abbett Growth, you can compare the effects of market volatilities on Maryland Tax-free and L 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 Maryland Tax-free with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maryland Tax-free and L Abbett.
Diversification Opportunities for Maryland Tax-free and L Abbett
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maryland and LGLSX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Maryland Tax Free Bond and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Growth and Maryland Tax-free 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 Maryland Tax Free Bond are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Growth has no effect on the direction of Maryland Tax-free i.e., Maryland Tax-free and L Abbett go up and down completely randomly.
Pair Corralation between Maryland Tax-free and L Abbett
Assuming the 90 days horizon Maryland Tax-free is expected to generate 5.51 times less return on investment than L Abbett. But when comparing it to its historical volatility, Maryland Tax Free Bond is 4.31 times less risky than L Abbett. It trades about 0.21 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,386 in L Abbett Growth on August 30, 2024 and sell it today you would earn a total of 365.00 from holding L Abbett Growth or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maryland Tax Free Bond vs. L Abbett Growth
Performance |
| Timeline |
| Maryland Tax Free |
| L Abbett Growth |
Maryland Tax-free and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maryland Tax-free and L Abbett
The main advantage of trading using opposite Maryland Tax-free and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maryland Tax-free position performs unexpectedly, L 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 L Abbett will offset losses from the drop in L Abbett's long position.| Maryland Tax-free vs. Maryland Tax Free Bond | Maryland Tax-free vs. HUMANA INC | Maryland Tax-free vs. Aquagold International | Maryland Tax-free vs. Barloworld Ltd ADR |
| L Abbett vs. Growth Fund Of | L Abbett vs. HUMANA INC | L Abbett vs. Aquagold International | L Abbett vs. Barloworld Ltd ADR |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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