Correlation Between Lord Abbett and Us Government
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Lord Abbett and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Us Government.
Diversification Opportunities for Lord Abbett and Us Government
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and UGSDX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Lord Abbett i.e., Lord Abbett and Us Government go up and down completely randomly.
Pair Corralation between Lord Abbett and Us Government
Assuming the 90 days horizon Lord Abbett Short is expected to generate 1.86 times more return on investment than Us Government. However, Lord Abbett is 1.86 times more volatile than Us Government Securities. It trades about 0.27 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.23 per unit of risk. If you would invest 966.00 in Lord Abbett Short on April 15, 2025 and sell it today you would earn a total of 11.00 from holding Lord Abbett Short or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Us Government Securities
Performance |
| Timeline |
| Lord Abbett Short |
| Us Government Securities |
Lord Abbett and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Us Government
The main advantage of trading using opposite Lord Abbett and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Lord Abbett vs. Us Government Securities | Lord Abbett vs. Aig Government Money | Lord Abbett vs. Dunham Porategovernment Bond | Lord Abbett vs. Virtus Seix Government |
| Us Government vs. Morningstar Unconstrained Allocation | Us Government vs. Old Westbury Large | Us Government vs. Transamerica Asset Allocation | Us Government vs. Growth Allocation 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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