Correlation Between Lord Abbett and Berwyn Income

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

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

Diversification Opportunities for Lord Abbett and Berwyn Income

0.0

Correlation Coefficient

Lord Abbett  Berwyn Income

Pay attention - limited upside

The 3 months correlation between Lord and Berwyn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Government and Berwyn Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berwyn 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 Government are associated (or correlated) with Berwyn Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berwyn Income has no effect on the direction of Lord Abbett i.e., Lord Abbett and Berwyn Income go up and down completely randomly.

Pair Corralation between Lord Abbett and Berwyn Income

If you would invest  1,315  in Berwyn Income Fund on December 28, 2024 and sell it today you would earn a total of  42.00  from holding Berwyn Income Fund or generate 3.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Lord Abbett Government  vs.  Berwyn Income Fund

Lord Abbett Government

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lord Abbett Government has generated negative risk-adjusted returns adding no value to fund investors. 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.

Berwyn Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Berwyn Income Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Berwyn Income 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 Berwyn Income

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

The idea behind Lord Abbett Government and Berwyn Income Fund 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.