Correlation Between Aquagold International and Lord Abbett

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

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

Diversification Opportunities for Aquagold International and Lord Abbett

-0.04

Correlation Coefficient

Aquagold International  Lord Abbett

Good diversification

The 3 months correlation between Aquagold and Lord is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Aquagold International 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 Aquagold International 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 Bond has no effect on the direction of Aquagold International i.e., Aquagold International and Lord Abbett go up and down completely randomly.

Pair Corralation between Aquagold International and Lord Abbett

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Lord Abbett. In addition to that, Aquagold International is 34.23 times more volatile than Lord Abbett Bond. It trades about -0.09 of its total potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.15 per unit of volatility. If you would invest  685.00  in Lord Abbett Bond on October 20, 2024 and sell it today you would earn a total of  32.00  from holding Lord Abbett Bond or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Aquagold International  vs.  Lord Abbett Bond

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Lord Abbett Bond

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Bond are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Lord Abbett

The main advantage of trading using opposite Aquagold International and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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 Aquagold International and Lord Abbett Bond 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.