Correlation Between Thrivent Moderately and Lord Abbett

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

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

Diversification Opportunities for Thrivent Moderately and Lord Abbett

-0.02

Correlation Coefficient

Thrivent Moderately  Lord Abbett

Good diversification

The 3 months correlation between Thrivent and Lord is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderately Aggressive and Lord Abbett Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Floating and Thrivent Moderately 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 Thrivent Moderately Aggressive 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 Floating has no effect on the direction of Thrivent Moderately i.e., Thrivent Moderately and Lord Abbett go up and down completely randomly.

Pair Corralation between Thrivent Moderately and Lord Abbett

Assuming the 90 days horizon Thrivent Moderately is expected to generate 2.44 times less return on investment than Lord Abbett. In addition to that, Thrivent Moderately is 4.95 times more volatile than Lord Abbett Floating. It trades about 0.01 of its total potential returns per unit of risk. Lord Abbett Floating is currently generating about 0.15 per unit of volatility. If you would invest  787.00  in Lord Abbett Floating on October 9, 2024 and sell it today you would earn a total of  31.00  from holding Lord Abbett Floating or generate 3.94% return on investment over 90 days.

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

Thrivent Moderately Aggressive  vs.  Lord Abbett Floating

Thrivent Moderately

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lord Abbett Floating

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Floating are ranked lower than 9 (%) 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.

Pair Trading with Thrivent Moderately and Lord Abbett

The main advantage of trading using opposite Thrivent Moderately and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Moderately 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 Thrivent Moderately Aggressive and Lord Abbett Floating 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.