Correlation Between Lord Abbett and Tiaa-cref Small/mid-cap

Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Tiaa-cref Small/mid-cap 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 Tiaa-cref Small/mid-cap 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 Tiaa Cref Smallmid Cap Equity, you can compare the effects of market volatilities on Lord Abbett and Tiaa-cref Small/mid-cap 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 Tiaa-cref Small/mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Tiaa-cref Small/mid-cap.

Diversification Opportunities for Lord Abbett and Tiaa-cref Small/mid-cap

-0.46

Correlation Coefficient

Lord Abbett  Tiaa-cref Small/mid-cap

Very good diversification

The 3 months correlation between Lord and Tiaa-cref is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inflation and Tiaa Cref Smallmid Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Small/mid-cap 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 Tiaa-cref Small/mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa-cref Small/mid-cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Tiaa-cref Small/mid-cap go up and down completely randomly.

Pair Corralation between Lord Abbett and Tiaa-cref Small/mid-cap

Assuming the 90 days horizon Lord Abbett Inflation is expected to generate 0.12 times more return on investment than Tiaa-cref Small/mid-cap. However, Lord Abbett Inflation is 8.33 times less risky than Tiaa-cref Small/mid-cap. It trades about 0.31 of its potential returns per unit of risk. Tiaa Cref Smallmid Cap Equity is currently generating about -0.06 per unit of risk. If you would invest  1,145  in Lord Abbett Inflation on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Lord Abbett Inflation or generate 2.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lord Abbett Inflation  vs.  Tiaa Cref Smallmid Cap Equity

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 24 (%) 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.

Tiaa-cref Small/mid-cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Smallmid Cap Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Tiaa-cref Small/mid-cap 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 Tiaa-cref Small/mid-cap

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

The idea behind Lord Abbett Inflation and Tiaa Cref Smallmid Cap Equity 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 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.