Correlation Between Touchstone Premium and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium 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 Touchstone Premium and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Premium Yield and Lord Abbett Alpha, you can compare the effects of market volatilities on Touchstone Premium 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 Touchstone Premium with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Lord Abbett.
Diversification Opportunities for Touchstone Premium and Lord Abbett
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Touchstone and Lord is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Lord Abbett Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Alpha and Touchstone Premium 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 Touchstone Premium Yield 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 Alpha has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Lord Abbett go up and down completely randomly.
Pair Corralation between Touchstone Premium and Lord Abbett
Assuming the 90 days horizon Touchstone Premium is expected to generate 1.11 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Touchstone Premium Yield is 1.03 times less risky than Lord Abbett. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Alpha is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,086 in Lord Abbett Alpha on September 1, 2024 and sell it today you would earn a total of 545.00 from holding Lord Abbett Alpha or generate 26.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Touchstone Premium Yield vs. Lord Abbett Alpha
Performance |
| Timeline |
| Touchstone Premium Yield |
| Lord Abbett Alpha |
Touchstone Premium and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Lord Abbett
The main advantage of trading using opposite Touchstone Premium and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium 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.| Touchstone Premium vs. Ab Small Cap | Touchstone Premium vs. Touchstone Small Cap | Touchstone Premium vs. Jpmorgan Small Cap | Touchstone Premium vs. Artisan Small Cap |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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