Correlation Between Lord Abbett and Federated Strategic

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

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

Diversification Opportunities for Lord Abbett and Federated Strategic

0.0

Correlation Coefficient

Lord Abbett  Federated Strategic

Pay attention - limited upside

The 3 months correlation between Lord and Federated is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Government and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Lord Abbett 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 Lord Abbett Government are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Strategic go up and down completely randomly.

Pair Corralation between Lord Abbett and Federated Strategic

If you would invest  823.00  in Federated Strategic Income on September 4, 2024 and sell it today you would earn a total of  5.00  from holding Federated Strategic Income or generate 0.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Lord Abbett Government  vs.  Federated Strategic Income

Lord Abbett Government

Risk-Adjusted Performance

0 of 100

Very Weak

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

Federated Strategic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Strategic Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lord Abbett and Federated Strategic

The main advantage of trading using opposite Lord Abbett and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.

The idea behind Lord Abbett Government and Federated Strategic Income 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.