Correlation Between Lord Abbett and Teton Convertible

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

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

Diversification Opportunities for Lord Abbett and Teton Convertible

0.64

Correlation Coefficient

Lord Abbett  Teton Convertible

Poor diversification

The 3 months correlation between Lord and Teton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High and Teton Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Vertible Securities 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 High are associated (or correlated) with Teton Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Vertible Securities has no effect on the direction of Lord Abbett i.e., Lord Abbett and Teton Convertible go up and down completely randomly.

Pair Corralation between Lord Abbett and Teton Convertible

Assuming the 90 days horizon Lord Abbett High is expected to under-perform the Teton Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lord Abbett High is 3.98 times less risky than Teton Convertible. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Teton Vertible Securities is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,378  in Teton Vertible Securities on October 8, 2024 and sell it today you would earn a total of  95.00  from holding Teton Vertible Securities or generate 6.89% return on investment over 90 days.

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

Lord Abbett High  vs.  Teton Vertible Securities

Lord Abbett High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett High 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.

Teton Vertible Securities

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teton Vertible Securities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Teton Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lord Abbett and Teton Convertible

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

The idea behind Lord Abbett High and Teton Vertible Securities 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.