Correlation Between American Funds and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Lord Abbett Focused, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Lord Abbett.
Diversification Opportunities for American Funds and Lord Abbett
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Lord is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Lord Abbett Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Focused and American Funds 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 American Funds Inflation 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 Focused has no effect on the direction of American Funds i.e., American Funds and Lord Abbett go up and down completely randomly.
Pair Corralation between American Funds and Lord Abbett
Assuming the 90 days horizon American Funds Inflation is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Funds Inflation is 5.63 times less risky than Lord Abbett. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Lord Abbett Focused is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,839 in Lord Abbett Focused on September 12, 2024 and sell it today you would earn a total of 165.00 from holding Lord Abbett Focused or generate 5.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
American Funds Inflation vs. Lord Abbett Focused
Performance |
Timeline |
American Funds Inflation |
Lord Abbett Focused |
American Funds and Lord Abbett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Lord Abbett
The main advantage of trading using opposite American Funds and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. American Funds Inflation |
Lord Abbett vs. Blackrock Conservative Prprdptfinstttnl | Lord Abbett vs. Calvert Conservative Allocation | Lord Abbett vs. Federated Hermes Conservative | Lord Abbett vs. Elfun Diversified Fund |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |