Correlation Between Investec Emerging and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Investec 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 Investec 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 Investec Emerging Markets and Lord Abbett Diversified, you can compare the effects of market volatilities on Investec 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 Investec Emerging with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Lord Abbett.
Diversification Opportunities for Investec Emerging and Lord Abbett
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Investec and Lord is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Investec 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 Investec 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 Diversified has no effect on the direction of Investec Emerging i.e., Investec Emerging and Lord Abbett go up and down completely randomly.
Pair Corralation between Investec Emerging and Lord Abbett
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 1.23 times more return on investment than Lord Abbett. However, Investec Emerging is 1.23 times more volatile than Lord Abbett Diversified. It trades about -0.17 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about -0.28 per unit of risk. If you would invest 1,140 in Investec Emerging Markets on October 9, 2024 and sell it today you would lose (20.00) from holding Investec Emerging Markets or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Lord Abbett Diversified
Performance |
| Timeline |
| Investec Emerging Markets |
| Lord Abbett Diversified |
Investec Emerging and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Lord Abbett
The main advantage of trading using opposite Investec Emerging and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec 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.| Investec Emerging vs. Rationalpier 88 Convertible | Investec Emerging vs. Gabelli Convertible And | Investec Emerging vs. Advent Claymore Convertible | Investec Emerging vs. Mainstay Vertible Fund |
| Lord Abbett vs. Money Market Obligations | Lord Abbett vs. Chestnut Street Exchange | Lord Abbett vs. Hsbc Treasury Money | Lord Abbett vs. Ab Government Exchange |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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