Correlation Between Lord Abbett and Shelton Emerging

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

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

Diversification Opportunities for Lord Abbett and Shelton Emerging

-0.08

Correlation Coefficient

Lord Abbett  Shelton Emerging

Good diversification

The 3 months correlation between Lord and Shelton is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intermediate and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets 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 Intermediate are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Lord Abbett i.e., Lord Abbett and Shelton Emerging go up and down completely randomly.

Pair Corralation between Lord Abbett and Shelton Emerging

Assuming the 90 days horizon Lord Abbett Intermediate is expected to generate 0.2 times more return on investment than Shelton Emerging. However, Lord Abbett Intermediate is 4.99 times less risky than Shelton Emerging. It trades about 0.02 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest  1,032  in Lord Abbett Intermediate on September 14, 2024 and sell it today you would earn a total of  3.00  from holding Lord Abbett Intermediate or generate 0.29% return on investment over 90 days.

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

Lord Abbett Intermediate  vs.  Shelton Emerging Markets

Lord Abbett Intermediate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Intermediate are ranked lower than 1 (%) 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.

Shelton Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shelton Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Shelton Emerging 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 Shelton Emerging

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

The idea behind Lord Abbett Intermediate and Shelton Emerging Markets 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..