Correlation Between Micron Technology and Lord Abbett

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Micron Technology 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 Micron Technology and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Lord Abbett Growth, you can compare the effects of market volatilities on Micron Technology 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 Micron Technology with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Lord Abbett.

Diversification Opportunities for Micron Technology and Lord Abbett

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Micron and Lord is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Micron Technology 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 Micron Technology 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 Growth has no effect on the direction of Micron Technology i.e., Micron Technology and Lord Abbett go up and down completely randomly.

Pair Corralation between Micron Technology and Lord Abbett

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Lord Abbett. In addition to that, Micron Technology is 2.41 times more volatile than Lord Abbett Growth. It trades about -0.07 of its total potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.1 per unit of volatility. If you would invest  2,731  in Lord Abbett Growth on September 25, 2024 and sell it today you would earn a total of  527.00  from holding Lord Abbett Growth or generate 19.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Micron Technology  vs.  Lord Abbett Growth

 Performance 
       Timeline  
Micron Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Micron Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Lord Abbett Growth 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Micron Technology and Lord Abbett Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Micron Technology and Lord Abbett

The main advantage of trading using opposite Micron Technology and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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 Micron Technology and Lord Abbett Growth 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.
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Volatility Analysis
Get historical volatility and risk analysis based on latest market data