Correlation Between Value Line and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Value Line 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 Value Line and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Line Select and Lord Abbett Convertible, you can compare the effects of market volatilities on Value Line 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 Value Line with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Line and Lord Abbett.
Diversification Opportunities for Value Line and Lord Abbett
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Value and Lord is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Value Line Select and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Value Line 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 Value Line Select 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 Convertible has no effect on the direction of Value Line i.e., Value Line and Lord Abbett go up and down completely randomly.
Pair Corralation between Value Line and Lord Abbett
Assuming the 90 days horizon Value Line is expected to generate 1.29 times less return on investment than Lord Abbett. In addition to that, Value Line is 1.35 times more volatile than Lord Abbett Convertible. It trades about 0.38 of its total potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.65 per unit of volatility. If you would invest 1,383 in Lord Abbett Convertible on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Lord Abbett Convertible or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Value Line Select vs. Lord Abbett Convertible
Performance |
| Timeline |
| Value Line Select |
| Lord Abbett Convertible |
Value Line and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Line and Lord Abbett
The main advantage of trading using opposite Value Line and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Line 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.| Value Line vs. Lord Abbett Convertible | Value Line vs. The Gamco Global | Value Line vs. Advent Claymore Convertible | Value Line vs. Absolute Convertible Arbitrage |
| Lord Abbett vs. Ab Bond Inflation | Lord Abbett vs. Nuveen Arizona Municipal | Lord Abbett vs. Federated Ohio Municipal | Lord Abbett vs. Oklahoma Municipal 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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