Correlation Between Lord Abbett and Oklahoma College

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

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

Diversification Opportunities for Lord Abbett and Oklahoma College

0.83

Correlation Coefficient

Lord Abbett  Oklahoma College

Very poor diversification

The 3 months correlation between Lord and Oklahoma is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Oklahoma College Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma College Savings 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 Convertible are associated (or correlated) with Oklahoma College. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma College Savings has no effect on the direction of Lord Abbett i.e., Lord Abbett and Oklahoma College go up and down completely randomly.

Pair Corralation between Lord Abbett and Oklahoma College

Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 4.21 times more return on investment than Oklahoma College. However, Lord Abbett is 4.21 times more volatile than Oklahoma College Savings. It trades about 0.11 of its potential returns per unit of risk. Oklahoma College Savings is currently generating about 0.09 per unit of risk. If you would invest  1,395  in Lord Abbett Convertible on October 6, 2024 and sell it today you would earn a total of  50.00  from holding Lord Abbett Convertible or generate 3.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.62%
Values	Daily Returns

Lord Abbett Convertible  vs.  Oklahoma College Savings

Lord Abbett Convertible

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Convertible are ranked lower than 9 (%) 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.

Oklahoma College Savings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oklahoma College Savings are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oklahoma College 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 Oklahoma College

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

The idea behind Lord Abbett Convertible and Oklahoma College Savings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.