Correlation Between Mmojx and Lord Abbett

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

By analyzing existing cross correlation between Mmojx and Lord Abbett Short, you can compare the effects of market volatilities on Mmojx and Lord Abbett 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 Mmojx with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mmojx and Lord Abbett.

Diversification Opportunities for Mmojx and Lord Abbett

0.11

Correlation Coefficient

Mmojx  Lord Abbett

Average diversification

The 3 months correlation between Mmojx and Lord is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mmojx and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Mmojx 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 Mmojx are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Short has no effect on the direction of Mmojx i.e., Mmojx and Lord Abbett go up and down completely randomly.

Pair Corralation between Mmojx and Lord Abbett

Assuming the 90 days horizon Mmojx is expected to under-perform the Lord Abbett. In addition to that, Mmojx is 14.48 times more volatile than Lord Abbett Short. It trades about -0.27 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about -0.12 per unit of volatility. If you would invest  388.00  in Lord Abbett Short on October 3, 2024 and sell it today you would lose (1.00) from holding Lord Abbett Short or give up 0.26% of portfolio value over 90 days.

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

Mmojx  vs.  Lord Abbett Short

Mmojx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mmojx has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Lord Abbett Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mmojx and Lord Abbett

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

The idea behind Mmojx and Lord Abbett Short 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.