Correlation Between Lord Abbett and Payden/kravitz Cash

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

By analyzing existing cross correlation between Lord Abbett Inflation and Paydenkravitz Cash Balance, you can compare the effects of market volatilities on Lord Abbett and Payden/kravitz Cash 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 Payden/kravitz Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Payden/kravitz Cash.

Diversification Opportunities for Lord Abbett and Payden/kravitz Cash

0.89

Correlation Coefficient

Lord Abbett  Payden/kravitz Cash

Very poor diversification

The 3 months correlation between Lord and Payden/kravitz is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inflation and Paydenkravitz Cash Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden/kravitz Cash 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 Inflation are associated (or correlated) with Payden/kravitz Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden/kravitz Cash has no effect on the direction of Lord Abbett i.e., Lord Abbett and Payden/kravitz Cash go up and down completely randomly.

Pair Corralation between Lord Abbett and Payden/kravitz Cash

Assuming the 90 days horizon Lord Abbett is expected to generate 1.06 times less return on investment than Payden/kravitz Cash. In addition to that, Lord Abbett is 1.77 times more volatile than Paydenkravitz Cash Balance. It trades about 0.22 of its total potential returns per unit of risk. Paydenkravitz Cash Balance is currently generating about 0.41 per unit of volatility. If you would invest  1,018  in Paydenkravitz Cash Balance on December 3, 2024 and sell it today you would earn a total of  19.00  from holding Paydenkravitz Cash Balance or generate 1.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Lord Abbett Inflation  vs.  Paydenkravitz Cash Balance

Lord Abbett Inflation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Inflation are ranked lower than 17 (%) 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.

Payden/kravitz Cash

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Paydenkravitz Cash Balance are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Payden/kravitz Cash 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 Payden/kravitz Cash

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

The idea behind Lord Abbett Inflation and Paydenkravitz Cash Balance 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.