Correlation Between Vanguard Emerging and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Vanguard 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 Vanguard 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 Vanguard Emerging Markets and Lord Abbett Trust, you can compare the effects of market volatilities on Vanguard 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 Vanguard Emerging with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Lord Abbett.
Diversification Opportunities for Vanguard Emerging and Lord Abbett
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Lord is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Lord Abbett Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Trust and Vanguard 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 Vanguard 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 Trust has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Lord Abbett go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Lord Abbett
Assuming the 90 days horizon Vanguard Emerging is expected to generate 1.18 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Vanguard Emerging Markets is 1.18 times less risky than Lord Abbett. It trades about 0.27 of its potential returns per unit of risk. Lord Abbett Trust is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,548 in Lord Abbett Trust on November 27, 2024 and sell it today you would earn a total of 72.00 from holding Lord Abbett Trust or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Lord Abbett Trust
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Lord Abbett Trust |
Vanguard Emerging and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Lord Abbett
The main advantage of trading using opposite Vanguard Emerging and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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.| Vanguard Emerging vs. Jhancock Diversified Macro | Vanguard Emerging vs. Franklin Federal Limited Term | Vanguard Emerging vs. Rbc Emerging Markets | Vanguard Emerging vs. Aqr Sustainable Long Short |
| Lord Abbett vs. Franklin Government Money | Lord Abbett vs. Doubleline Emerging Markets | Lord Abbett vs. Pace Select Advisors | Lord Abbett vs. First American Funds |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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