Correlation Between Voya Target and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Voya Target 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 Voya Target and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Target Retirement and Lord Abbett High, you can compare the effects of market volatilities on Voya Target 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 Voya Target with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Lord Abbett.
Diversification Opportunities for Voya Target and Lord Abbett
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Lord is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Lord Abbett High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett High and Voya Target 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 Voya Target Retirement 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 High has no effect on the direction of Voya Target i.e., Voya Target and Lord Abbett go up and down completely randomly.
Pair Corralation between Voya Target and Lord Abbett
Assuming the 90 days horizon Voya Target Retirement is expected to generate 0.78 times more return on investment than Lord Abbett. However, Voya Target Retirement is 1.28 times less risky than Lord Abbett. It trades about 0.1 of its potential returns per unit of risk. Lord Abbett High is currently generating about 0.06 per unit of risk. If you would invest 1,072 in Voya Target Retirement on September 5, 2024 and sell it today you would earn a total of 316.00 from holding Voya Target Retirement or generate 29.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Voya Target Retirement vs. Lord Abbett High
Performance |
| Timeline |
| Voya Target Retirement |
| Lord Abbett High |
Voya Target and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Lord Abbett
The main advantage of trading using opposite Voya Target and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target 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.| Voya Target vs. Prudential High Yield | Voya Target vs. Msift High Yield | Voya Target vs. American Century High | Voya Target vs. T Rowe Price |
| Lord Abbett vs. Qs Large Cap | Lord Abbett vs. Americafirst Large Cap | Lord Abbett vs. Dunham Large Cap | Lord Abbett vs. American Mutual 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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