Correlation Between Lord Abbett and Hcm Dynamic

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

By analyzing existing cross correlation between Lord Abbett Affiliated and Hcm Dynamic Income, you can compare the effects of market volatilities on Lord Abbett and Hcm Dynamic 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 Hcm Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Hcm Dynamic.

Diversification Opportunities for Lord Abbett and Hcm Dynamic

-0.07

Correlation Coefficient

Lord Abbett  Hcm Dynamic

Good diversification

The 3 months correlation between Lord and Hcm is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Hcm Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hcm Dynamic Income 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 Affiliated are associated (or correlated) with Hcm Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hcm Dynamic Income has no effect on the direction of Lord Abbett i.e., Lord Abbett and Hcm Dynamic go up and down completely randomly.

Pair Corralation between Lord Abbett and Hcm Dynamic

Assuming the 90 days horizon Lord Abbett Affiliated is expected to generate 1.51 times more return on investment than Hcm Dynamic. However, Lord Abbett is 1.51 times more volatile than Hcm Dynamic Income. It trades about 0.09 of its potential returns per unit of risk. Hcm Dynamic Income is currently generating about 0.06 per unit of risk. If you would invest  1,576  in Lord Abbett Affiliated on September 21, 2024 and sell it today you would earn a total of  289.00  from holding Lord Abbett Affiliated or generate 18.34% return on investment over 90 days.

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

Lord Abbett Affiliated  vs.  Hcm Dynamic Income

Lord Abbett Affiliated

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hcm Dynamic Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hcm Dynamic Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Hcm Dynamic 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 Hcm Dynamic

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

The idea behind Lord Abbett Affiliated and Hcm Dynamic Income 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.