Correlation Between Vanguard Total and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Total 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 Total International and Lord Abbett Value, you can compare the effects of market volatilities on Vanguard Total 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 Total with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Lord Abbett.
Diversification Opportunities for Vanguard Total and Lord Abbett
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and Lord is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Lord Abbett Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Value and Vanguard Total 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 Total International 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 Value has no effect on the direction of Vanguard Total i.e., Vanguard Total and Lord Abbett go up and down completely randomly.
Pair Corralation between Vanguard Total and Lord Abbett
Assuming the 90 days horizon Vanguard Total is expected to generate 4.9 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Vanguard Total International is 1.43 times less risky than Lord Abbett. It trades about 0.02 of its potential returns per unit of risk. Lord Abbett Value is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,893 in Lord Abbett Value on August 31, 2024 and sell it today you would earn a total of 148.00 from holding Lord Abbett Value or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Lord Abbett Value
Performance |
| Timeline |
| Vanguard Total Inter |
| Lord Abbett Value |
Vanguard Total and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Lord Abbett
The main advantage of trading using opposite Vanguard Total and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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 Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index |
| Lord Abbett vs. Vanguard Small Cap Index | Lord Abbett vs. Vanguard Institutional Index | Lord Abbett vs. Vanguard Total International | Lord Abbett vs. Vanguard Institutional Index |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |