Correlation Between Lord Abbett and Blackrock Mid-cap

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

By analyzing existing cross correlation between Lord Abbett Bond and Blackrock Mid Cap Growth, you can compare the effects of market volatilities on Lord Abbett and Blackrock Mid-cap 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 Blackrock Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Blackrock Mid-cap.

Diversification Opportunities for Lord Abbett and Blackrock Mid-cap

-0.04

Correlation Coefficient

Lord Abbett  Blackrock Mid-cap

Good diversification

The 3 months correlation between Lord and Blackrock is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Bond and Blackrock Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Mid Cap 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 Bond are associated (or correlated) with Blackrock Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Mid Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Blackrock Mid-cap go up and down completely randomly.

Pair Corralation between Lord Abbett and Blackrock Mid-cap

Assuming the 90 days horizon Lord Abbett Bond is expected to generate 0.12 times more return on investment than Blackrock Mid-cap. However, Lord Abbett Bond is 8.58 times less risky than Blackrock Mid-cap. It trades about 0.06 of its potential returns per unit of risk. Blackrock Mid Cap Growth is currently generating about -0.1 per unit of risk. If you would invest  699.00  in Lord Abbett Bond on December 29, 2024 and sell it today you would earn a total of  6.00  from holding Lord Abbett Bond or generate 0.86% return on investment over 90 days.

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

Lord Abbett Bond  vs.  Blackrock Mid Cap Growth

Lord Abbett Bond

Risk-Adjusted Performance

Insignificant

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

Blackrock Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Mid Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Lord Abbett and Blackrock Mid-cap

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

The idea behind Lord Abbett Bond and Blackrock Mid Cap 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.