Correlation Between Prudential California and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Prudential California 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 Prudential California and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential California Muni and Lord Abbett Intermediate, you can compare the effects of market volatilities on Prudential California 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 Prudential California with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential California and Lord Abbett.
Diversification Opportunities for Prudential California and Lord Abbett
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and Lord is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Prudential California Muni and Lord Abbett Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Intermediate and Prudential California 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 Prudential California Muni 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 Intermediate has no effect on the direction of Prudential California i.e., Prudential California and Lord Abbett go up and down completely randomly.
Pair Corralation between Prudential California and Lord Abbett
Assuming the 90 days horizon Prudential California Muni is expected to generate 0.81 times more return on investment than Lord Abbett. However, Prudential California Muni is 1.24 times less risky than Lord Abbett. It trades about 0.25 of its potential returns per unit of risk. Lord Abbett Intermediate is currently generating about 0.17 per unit of risk. If you would invest 964.00 in Prudential California Muni on May 29, 2025 and sell it today you would earn a total of 15.00 from holding Prudential California Muni or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential California Muni vs. Lord Abbett Intermediate
Performance |
| Timeline |
| Prudential California |
| Lord Abbett Intermediate |
Prudential California and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential California and Lord Abbett
The main advantage of trading using opposite Prudential California and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential California 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.| Prudential California vs. Goldman Sachs Technology | Prudential California vs. Columbia Global Technology | Prudential California vs. Mfs Technology Fund | Prudential California vs. Allianzgi Technology Fund |
| Lord Abbett vs. Omni Small Cap Value | Lord Abbett vs. Pace Smallmedium Value | Lord Abbett vs. Northern Small Cap | Lord Abbett vs. American Century Etf |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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