Correlation Between Multimanager Lifestyle and Lord Abbett

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle 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 Multimanager Lifestyle and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Moderate and Lord Abbett Growth, you can compare the effects of market volatilities on Multimanager Lifestyle 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 Multimanager Lifestyle with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Lord Abbett.

Diversification Opportunities for Multimanager Lifestyle and Lord Abbett

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Multimanager and Lord is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Moderat and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Multimanager Lifestyle 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 Multimanager Lifestyle Moderate 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 Growth has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Lord Abbett go up and down completely randomly.

Pair Corralation between Multimanager Lifestyle and Lord Abbett

Assuming the 90 days horizon Multimanager Lifestyle is expected to generate 11.48 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Multimanager Lifestyle Moderate is 4.06 times less risky than Lord Abbett. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,977  in Lord Abbett Growth on October 25, 2024 and sell it today you would earn a total of  402.00  from holding Lord Abbett Growth or generate 13.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.33%
ValuesDaily Returns

Multimanager Lifestyle Moderat  vs.  Lord Abbett Growth

 Performance 
       Timeline  
Multimanager Lifestyle 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Moderate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Multimanager Lifestyle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Lord Abbett Growth 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lord Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Multimanager Lifestyle and Lord Abbett Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Multimanager Lifestyle and Lord Abbett

The main advantage of trading using opposite Multimanager Lifestyle and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle 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 Multimanager Lifestyle Moderate and Lord Abbett Growth 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.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes