Correlation Between Salient Tactical and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Salient Tactical 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 Salient Tactical and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient Tactical Growth and Lord Abbett Short, you can compare the effects of market volatilities on Salient Tactical 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 Salient Tactical with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Tactical and Lord Abbett.
Diversification Opportunities for Salient Tactical and Lord Abbett
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salient and Lord is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Salient Tactical Growth 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 Salient Tactical 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 Salient Tactical Growth 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 Salient Tactical i.e., Salient Tactical and Lord Abbett go up and down completely randomly.
Pair Corralation between Salient Tactical and Lord Abbett
Assuming the 90 days horizon Salient Tactical Growth is expected to under-perform the Lord Abbett. In addition to that, Salient Tactical is 5.15 times more volatile than Lord Abbett Short. It trades about -0.01 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about 0.22 per unit of volatility. If you would invest 387.00 in Lord Abbett Short on December 2, 2024 and sell it today you would earn a total of 2.00 from holding Lord Abbett Short or generate 0.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Salient Tactical Growth vs. Lord Abbett Short
Performance |
Timeline |
Salient Tactical Growth |
Lord Abbett Short |
Salient Tactical and Lord Abbett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salient Tactical and Lord Abbett
The main advantage of trading using opposite Salient Tactical and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Tactical 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.Salient Tactical vs. Gmo Asset Allocation | Salient Tactical vs. The Hartford Servative | Salient Tactical vs. Washington Mutual Investors | Salient Tactical vs. Hartford Moderate Allocation |
Lord Abbett vs. Ultra Short Fixed Income | Lord Abbett vs. Tax Managed International Equity | Lord Abbett vs. Federated Government Income | Lord Abbett vs. Crossmark Steward Equity |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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