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 International, 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
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Investec and Lord is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Lord Abbett International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett International 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 International 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 under-perform the Lord Abbett. In addition to that, Investec Emerging is 2.39 times more volatile than Lord Abbett International. It trades about -0.02 of its total potential returns per unit of risk. Lord Abbett International is currently generating about 0.1 per unit of volatility. If you would invest 1,951 in Lord Abbett International on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Lord Abbett International or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Lord Abbett International
Performance |
| Timeline |
| Investec Emerging Markets |
| Lord Abbett International |
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. Rbc Emerging Markets | Investec Emerging vs. Locorr Market Trend | Investec Emerging vs. Calvert Developed Market | Investec Emerging vs. Ab All Market |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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