Correlation Between L Abbett and Federated Premier
Can any of the company-specific risk be diversified away by investing in both L Abbett and Federated Premier 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 L Abbett and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Growth and Federated Premier Municipal, you can compare the effects of market volatilities on L Abbett and Federated Premier 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 L Abbett with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Federated Premier.
Diversification Opportunities for L Abbett and Federated Premier
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGLUX and Federated is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and L 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 L Abbett Growth are associated (or correlated) with Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of L Abbett i.e., L Abbett and Federated Premier go up and down completely randomly.
Pair Corralation between L Abbett and Federated Premier
Assuming the 90 days horizon L Abbett Growth is expected to generate 2.08 times more return on investment than Federated Premier. However, L Abbett is 2.08 times more volatile than Federated Premier Municipal. It trades about 0.11 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.04 per unit of risk. If you would invest 2,550 in L Abbett Growth on September 23, 2024 and sell it today you would earn a total of 2,526 from holding L Abbett Growth or generate 99.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
L Abbett Growth vs. Federated Premier Municipal
Performance |
Timeline |
L Abbett Growth |
Federated Premier |
L Abbett and Federated Premier Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with L Abbett and Federated Premier
The main advantage of trading using opposite L Abbett and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Federated Premier 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 Federated Premier will offset losses from the drop in Federated Premier's long position.L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Focused | L Abbett vs. Floating Rate Fund |
Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |