Correlation Between Swedbank Robur and Lord Abbett

Can any of the company-specific risk be diversified away by investing in both Swedbank Robur 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 Swedbank Robur and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Swedbank Robur Corporate and Lord Abbett Short, you can compare the effects of market volatilities on Swedbank Robur 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 Swedbank Robur with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank Robur and Lord Abbett.

Diversification Opportunities for Swedbank Robur and Lord Abbett

0.46

Correlation Coefficient

Swedbank Robur  Lord Abbett

Very weak diversification

The 3 months correlation between Swedbank and Lord is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Swedbank Robur 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 Swedbank Robur Corporate 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 Short has no effect on the direction of Swedbank Robur i.e., Swedbank Robur and Lord Abbett go up and down completely randomly.

Pair Corralation between Swedbank Robur and Lord Abbett

Assuming the 90 days trading horizon Swedbank Robur is expected to generate 6.46 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Swedbank Robur Corporate is 2.73 times less risky than Lord Abbett. It trades about 0.12 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,075  in Lord Abbett Short on October 8, 2024 and sell it today you would earn a total of  80.00  from holding Lord Abbett Short or generate 7.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Swedbank Robur Corporate  vs.  Lord Abbett Short

Swedbank Robur Corporate

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Swedbank Robur is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the investors.

Lord Abbett Short

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Lord Abbett Short has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat weak basic indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Swedbank Robur and Lord Abbett

The main advantage of trading using opposite Swedbank Robur and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank Robur 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.

The idea behind Swedbank Robur Corporate and Lord Abbett Short pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.