Correlation Between Cohen Steers and Lord Abbett

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

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

Diversification Opportunities for Cohen Steers and Lord Abbett

0.42

Correlation Coefficient

Cohen Steers  Lord Abbett

Very weak diversification

The 3 months correlation between Cohen and Lord is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Prfrd and Lord Abbett Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Micro and Cohen Steers 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 Cohen Steers Prfrd 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 Micro has no effect on the direction of Cohen Steers i.e., Cohen Steers and Lord Abbett go up and down completely randomly.

Pair Corralation between Cohen Steers and Lord Abbett

Assuming the 90 days horizon Cohen Steers is expected to generate 13.04 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Cohen Steers Prfrd is 9.34 times less risky than Lord Abbett. It trades about 0.16 of its potential returns per unit of risk. Lord Abbett Micro Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,885  in Lord Abbett Micro Cap on September 3, 2024 and sell it today you would earn a total of  408.00  from holding Lord Abbett Micro Cap or generate 21.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cohen Steers Prfrd  vs.  Lord Abbett Micro Cap

Cohen Steers Prfrd

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Prfrd are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Micro

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Micro Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cohen Steers and Lord Abbett

The main advantage of trading using opposite Cohen Steers and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers 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 Cohen Steers Prfrd and Lord Abbett Micro Cap 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.