Correlation Between Lord Abbett and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Nebraska Municipal 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 Nebraska Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Diversified and Nebraska Municipal Fund, you can compare the effects of market volatilities on Lord Abbett and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Nebraska Municipal.
Diversification Opportunities for Lord Abbett and Nebraska Municipal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lord and Nebraska is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Diversified are associated (or correlated) with Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Lord Abbett i.e., Lord Abbett and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Lord Abbett and Nebraska Municipal
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 1.44 times more return on investment than Nebraska Municipal. However, Lord Abbett is 1.44 times more volatile than Nebraska Municipal Fund. It trades about 0.02 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about -0.09 per unit of risk. If you would invest 1,598 in Lord Abbett Diversified on December 28, 2024 and sell it today you would earn a total of 7.00 from holding Lord Abbett Diversified or generate 0.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Lord Abbett Diversified vs. Nebraska Municipal Fund
Performance |
Timeline |
Lord Abbett Diversified |
Nebraska Municipal |
Lord Abbett and Nebraska Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lord Abbett and Nebraska Municipal
The main advantage of trading using opposite Lord Abbett and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.Lord Abbett vs. Lind Capital Partners | Lord Abbett vs. Gamco Global Telecommunications | Lord Abbett vs. Bbh Intermediate Municipal | Lord Abbett vs. Goldman Sachs Short |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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