Correlation Between Extended Market and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Extended Market 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 Extended Market and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Lord Abbett Global, you can compare the effects of market volatilities on Extended Market 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 Extended Market with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Lord Abbett.
Diversification Opportunities for Extended Market and Lord Abbett
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Extended and Lord is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global and Extended Market 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 Extended Market Index 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 Global has no effect on the direction of Extended Market i.e., Extended Market and Lord Abbett go up and down completely randomly.
Pair Corralation between Extended Market and Lord Abbett
If you would invest 2,443 in Extended Market Index on September 14, 2024 and sell it today you would earn a total of 17.00 from holding Extended Market Index or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Extended Market Index vs. Lord Abbett Global
Performance |
| Timeline |
| Extended Market Index |
| Lord Abbett Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Extended Market and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Lord Abbett
The main advantage of trading using opposite Extended Market and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market 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.| Extended Market vs. Income Fund Income | Extended Market vs. Usaa Nasdaq 100 | Extended Market vs. Victory Diversified Stock | Extended Market vs. Intermediate Term Bond Fund |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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