Correlation Between Amg Managers and Lord Abbett

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

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

Diversification Opportunities for Amg Managers and Lord Abbett

0.62

Correlation Coefficient

Amg Managers  Lord Abbett

Poor diversification

The 3 months correlation between Amg and Lord is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Lord Abbett Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Trust and Amg Managers 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 Amg Managers Centersquare 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 Trust has no effect on the direction of Amg Managers i.e., Amg Managers and Lord Abbett go up and down completely randomly.

Pair Corralation between Amg Managers and Lord Abbett

Assuming the 90 days horizon Amg Managers is expected to generate 24.18 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Amg Managers Centersquare is 1.04 times less risky than Lord Abbett. It trades about 0.0 of its potential returns per unit of risk. Lord Abbett Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,579  in Lord Abbett Trust on December 26, 2024 and sell it today you would earn a total of  86.00  from holding Lord Abbett Trust or generate 5.45% return on investment over 90 days.

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

Amg Managers Centersquare  vs.  Lord Abbett Trust

Amg Managers Centersquare

Risk-Adjusted Performance

Very Weak

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

Lord Abbett Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Trust are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and 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 Amg Managers and Lord Abbett

The main advantage of trading using opposite Amg Managers and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers 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 Amg Managers Centersquare and Lord Abbett Trust 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.