Correlation Between Lord Abbett and Financial Services
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Financial Services 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 Lord Abbett and Financial Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Small and Financial Services Portfolio, you can compare the effects of market volatilities on Lord Abbett and Financial Services 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 Lord Abbett with a short position of Financial Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Financial Services.
Diversification Opportunities for Lord Abbett and Financial Services
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Financial is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Financial Services Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Services and Lord Abbett 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 Lord Abbett Small are associated (or correlated) with Financial Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Services has no effect on the direction of Lord Abbett i.e., Lord Abbett and Financial Services go up and down completely randomly.
Pair Corralation between Lord Abbett and Financial Services
Assuming the 90 days horizon Lord Abbett Small is expected to generate 1.38 times more return on investment than Financial Services. However, Lord Abbett is 1.38 times more volatile than Financial Services Portfolio. It trades about 0.16 of its potential returns per unit of risk. Financial Services Portfolio is currently generating about 0.15 per unit of risk. If you would invest 1,928 in Lord Abbett Small on May 29, 2025 and sell it today you would earn a total of 215.00 from holding Lord Abbett Small or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Financial Services Portfolio
Performance |
| Timeline |
| Lord Abbett Small |
| Financial Services |
Lord Abbett and Financial Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Financial Services
The main advantage of trading using opposite Lord Abbett and Financial Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Financial Services 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 Financial Services will offset losses from the drop in Financial Services' long position.| Lord Abbett vs. American Century Etf | Lord Abbett vs. Valic Company I | Lord Abbett vs. Northern Small Cap | Lord Abbett vs. Ultrasmall Cap Profund Ultrasmall Cap |
| Financial Services vs. Lord Abbett Diversified | Financial Services vs. Stone Ridge Diversified | Financial Services vs. Wells Fargo Diversified | Financial Services vs. Invesco Diversified Dividend |
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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