Correlation Between Lord Abbett and Federated Global

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

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

Diversification Opportunities for Lord Abbett and Federated Global

0.4

Correlation Coefficient

Lord Abbett  Federated Global

Very weak diversification

The 3 months correlation between Lord and Federated is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Lord Abbett 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 Lord Abbett High are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Global go up and down completely randomly.

Pair Corralation between Lord Abbett and Federated Global

Assuming the 90 days horizon Lord Abbett High is expected to generate 0.4 times more return on investment than Federated Global. However, Lord Abbett High is 2.5 times less risky than Federated Global. It trades about 0.07 of its potential returns per unit of risk. Federated Global Allocation is currently generating about -0.01 per unit of risk. If you would invest  1,075  in Lord Abbett High on December 20, 2024 and sell it today you would earn a total of  11.00  from holding Lord Abbett High or generate 1.02% return on investment over 90 days.

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

Lord Abbett High  vs.  Federated Global Allocation

Lord Abbett High

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett High are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated Global All

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federated Global Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Federated Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lord Abbett and Federated Global

The main advantage of trading using opposite Lord Abbett and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Global 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 Federated Global will offset losses from the drop in Federated Global's long position.

The idea behind Lord Abbett High and Federated Global Allocation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..