Correlation Between Navigator Tactical and Lord Abbett

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

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

Diversification Opportunities for Navigator Tactical and Lord Abbett

-0.72

Correlation Coefficient

Navigator Tactical  Lord Abbett

Pay attention - limited upside

The 3 months correlation between Navigator and Lord is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Tactical Investment and Lord Abbett Affiliated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Affiliated and Navigator Tactical 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 Navigator Tactical Investment 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 Affiliated has no effect on the direction of Navigator Tactical i.e., Navigator Tactical and Lord Abbett go up and down completely randomly.

Pair Corralation between Navigator Tactical and Lord Abbett

Assuming the 90 days horizon Navigator Tactical Investment is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Navigator Tactical Investment is 3.89 times less risky than Lord Abbett. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Lord Abbett Affiliated is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,909  in Lord Abbett Affiliated on September 13, 2024 and sell it today you would earn a total of  38.00  from holding Lord Abbett Affiliated or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Navigator Tactical Investment  vs.  Lord Abbett Affiliated

Navigator Tactical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lord Abbett Affiliated

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Affiliated are ranked lower than 3 (%) 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 Navigator Tactical and Lord Abbett

The main advantage of trading using opposite Navigator Tactical and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Tactical 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 Navigator Tactical Investment and Lord Abbett Affiliated 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.