Correlation Between Binance Coin and Lord Abbett

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

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

Diversification Opportunities for Binance Coin and Lord Abbett

-0.59

Correlation Coefficient

Binance Coin  Lord Abbett

Excellent diversification

The 3 months correlation between Binance and Lord is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin and Lord Abbett Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Intl and Binance Coin 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 Binance Coin 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 Intl has no effect on the direction of Binance Coin i.e., Binance Coin and Lord Abbett go up and down completely randomly.

Pair Corralation between Binance Coin and Lord Abbett

Assuming the 90 days trading horizon Binance Coin is expected to under-perform the Lord Abbett. In addition to that, Binance Coin is 3.32 times more volatile than Lord Abbett Intl. It trades about -0.02 of its total potential returns per unit of risk. Lord Abbett Intl is currently generating about 0.21 per unit of volatility. If you would invest  1,431  in Lord Abbett Intl on December 20, 2024 and sell it today you would earn a total of  176.00  from holding Lord Abbett Intl or generate 12.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Binance Coin  vs.  Lord Abbett Intl

Binance Coin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Binance Coin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Binance Coin is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Lord Abbett Intl

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Intl are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Binance Coin and Lord Abbett

The main advantage of trading using opposite Binance Coin and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin 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 Binance Coin and Lord Abbett Intl 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.