Correlation Between TRON and Lord Abbett

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

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

Diversification Opportunities for TRON and Lord Abbett

0.3

Correlation Coefficient

TRON  Lord Abbett

Weak diversification

The 3 months correlation between TRON and Lord is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding TRON 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 TRON 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 TRON 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 TRON i.e., TRON and Lord Abbett go up and down completely randomly.

Pair Corralation between TRON and Lord Abbett

Assuming the 90 days trading horizon TRON is expected to generate 49.87 times more return on investment than Lord Abbett. However, TRON is 49.87 times more volatile than Lord Abbett Short. It trades about 0.08 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.16 per unit of risk. If you would invest  11.00  in TRON on October 9, 2024 and sell it today you would earn a total of  14.00  from holding TRON or generate 127.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	66.8%
Values	Daily Returns

TRON  vs.  Lord Abbett Short

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 forward 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 TRON and Lord Abbett

The main advantage of trading using opposite TRON and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON 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 TRON 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..