Correlation Between Lord Abbett and Aggressive Balanced
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aggressive Balanced 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 Aggressive Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and Aggressive Balanced Allocation, you can compare the effects of market volatilities on Lord Abbett and Aggressive Balanced 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 Aggressive Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aggressive Balanced.
Diversification Opportunities for Lord Abbett and Aggressive Balanced
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Aggressive is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Aggressive Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Balanced 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 Short are associated (or correlated) with Aggressive Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Balanced has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aggressive Balanced go up and down completely randomly.
Pair Corralation between Lord Abbett and Aggressive Balanced
Assuming the 90 days horizon Lord Abbett is expected to generate 2.0 times less return on investment than Aggressive Balanced. But when comparing it to its historical volatility, Lord Abbett Short is 2.71 times less risky than Aggressive Balanced. It trades about 0.38 of its potential returns per unit of risk. Aggressive Balanced Allocation is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,143 in Aggressive Balanced Allocation on March 27, 2025 and sell it today you would earn a total of 79.00 from holding Aggressive Balanced Allocation or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.56% |
| Values | Daily Returns |
Lord Abbett Short vs. Aggressive Balanced Allocation
Performance |
| Timeline |
| Lord Abbett Short |
| Aggressive Balanced |
Lord Abbett and Aggressive Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aggressive Balanced
The main advantage of trading using opposite Lord Abbett and Aggressive Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aggressive Balanced 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 Aggressive Balanced will offset losses from the drop in Aggressive Balanced's long position.| Lord Abbett vs. Abs Insights Emerging | Lord Abbett vs. Templeton Emerging Markets | Lord Abbett vs. Goldman Sachs Emerging | Lord Abbett vs. Vy Jpmorgan Emerging |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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