Correlation Between Lord Abbett and Dow Jones

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

Diversification Opportunities for Lord Abbett and Dow Jones

LordDowDiversified AwayLordDowDiversified Away100%
0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Lord and Dow is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Developing and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Developing are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Lord Abbett i.e., Lord Abbett and Dow Jones go up and down completely randomly.
    Optimize

Pair Corralation between Lord Abbett and Dow Jones

Assuming the 90 days horizon Lord Abbett Developing is expected to under-perform the Dow Jones. In addition to that, Lord Abbett is 2.88 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of volatility. If you would invest  4,348,783  in Dow Jones Industrial on November 18, 2024 and sell it today you would earn a total of  105,825  from holding Dow Jones Industrial or generate 2.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Lord Abbett Developing  vs.  Dow Jones Industrial

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-8-6-4-202
JavaScript chart by amCharts 3.21.15LADYX DJI
       Timeline  

Lord Abbett and Dow Jones Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.52-1.9-1.28-0.66-0.0420.531.121.712.32.89 0.20.40.60.8
JavaScript chart by amCharts 3.21.15LADYX DJI
       Returns  

Pair Trading with Lord Abbett and Dow Jones

The main advantage of trading using opposite Lord Abbett and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.
The idea behind Lord Abbett Developing and Dow Jones Industrial 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Bonds Directory
Find actively traded corporate debentures issued by US companies
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators