Correlation Between Inflation-protected and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Inflation-protected 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 Inflation-protected and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Lord Abbett High, you can compare the effects of market volatilities on Inflation-protected 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 Inflation-protected with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Lord Abbett.
Diversification Opportunities for Inflation-protected and Lord Abbett
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inflation-protected and Lord is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Lord Abbett High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett High and Inflation-protected 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 Inflation Protected Bond Fund 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 High has no effect on the direction of Inflation-protected i.e., Inflation-protected and Lord Abbett go up and down completely randomly.
Pair Corralation between Inflation-protected and Lord Abbett
Assuming the 90 days horizon Inflation-protected is expected to generate 3.31 times less return on investment than Lord Abbett. In addition to that, Inflation-protected is 2.37 times more volatile than Lord Abbett High. It trades about 0.02 of its total potential returns per unit of risk. Lord Abbett High is currently generating about 0.15 per unit of volatility. If you would invest 635.00 in Lord Abbett High on October 26, 2024 and sell it today you would earn a total of 12.00 from holding Lord Abbett High or generate 1.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Inflation Protected Bond Fund vs. Lord Abbett High
Performance |
Timeline |
Inflation Protected |
Lord Abbett High |
Inflation-protected and Lord Abbett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inflation-protected and Lord Abbett
The main advantage of trading using opposite Inflation-protected and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected 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.Inflation-protected vs. Jpmorgan Diversified Fund | Inflation-protected vs. Tax Managed Mid Small | Inflation-protected vs. Madison Diversified Income | Inflation-protected vs. Wells Fargo Diversified |
Lord Abbett vs. Metropolitan West High | Lord Abbett vs. Millerhoward High Income | Lord Abbett vs. Pace High Yield | Lord Abbett vs. Aqr Risk Parity |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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