Correlation Between Lord Abbett and Ocm Mutual

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

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

Diversification Opportunities for Lord Abbett and Ocm Mutual

-0.77

Correlation Coefficient

Lord Abbett  Ocm Mutual

Pay attention - limited upside

The 3 months correlation between Lord and Ocm is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Investment and Ocm Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocm Mutual Fund 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 Investment are associated (or correlated) with Ocm Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocm Mutual Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and Ocm Mutual go up and down completely randomly.

Pair Corralation between Lord Abbett and Ocm Mutual

Assuming the 90 days horizon Lord Abbett is expected to generate 2.11 times less return on investment than Ocm Mutual. But when comparing it to its historical volatility, Lord Abbett Investment is 13.51 times less risky than Ocm Mutual. It trades about 0.29 of its potential returns per unit of risk. Ocm Mutual Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  952.00  in Ocm Mutual Fund on October 27, 2024 and sell it today you would earn a total of  370.00  from holding Ocm Mutual Fund or generate 38.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.23%
Values	Daily Returns

Lord Abbett Investment  vs.  Ocm Mutual Fund

Lord Abbett Investment

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Investment are ranked lower than 18 (%) 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.

Ocm Mutual Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocm Mutual Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators 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 Ocm Mutual

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

The idea behind Lord Abbett Investment and Ocm Mutual 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.