Correlation Between DNB Norge and Lord Abbett

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

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

Diversification Opportunities for DNB Norge and Lord Abbett

0.0

Correlation Coefficient

DNB Norge  Lord Abbett

Pay attention - limited upside

The 3 months correlation between DNB and Lord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DNB Norge Selektiv and Lord Abbett Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Multi and DNB Norge 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 DNB Norge Selektiv 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 Multi has no effect on the direction of DNB Norge i.e., DNB Norge and Lord Abbett go up and down completely randomly.

Pair Corralation between DNB Norge and Lord Abbett

If you would invest  166,917  in DNB Norge Selektiv on September 19, 2024 and sell it today you would earn a total of  2,201  from holding DNB Norge Selektiv or generate 1.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DNB Norge Selektiv  vs.  Lord Abbett Multi

DNB Norge Selektiv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DNB Norge Selektiv are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, DNB Norge is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Lord Abbett Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett Multi has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Lord Abbett is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DNB Norge and Lord Abbett

The main advantage of trading using opposite DNB Norge and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DNB Norge 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 DNB Norge Selektiv and Lord Abbett Multi 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.