Correlation Between Lord Abbett and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Intermediate Government 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 Intermediate Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Convertible and Intermediate Government Bond, you can compare the effects of market volatilities on Lord Abbett and Intermediate Government 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 Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Intermediate Government.
Diversification Opportunities for Lord Abbett and Intermediate Government
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lord and Intermediate is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government 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 Convertible are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Lord Abbett i.e., Lord Abbett and Intermediate Government go up and down completely randomly.
Pair Corralation between Lord Abbett and Intermediate Government
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 7.84 times more return on investment than Intermediate Government. However, Lord Abbett is 7.84 times more volatile than Intermediate Government Bond. It trades about 0.15 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about -0.04 per unit of risk. If you would invest 1,376 in Lord Abbett Convertible on September 23, 2024 and sell it today you would earn a total of 81.00 from holding Lord Abbett Convertible or generate 5.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lord Abbett Convertible vs. Intermediate Government Bond
Performance |
Timeline |
Lord Abbett Convertible |
Intermediate Government |
Lord Abbett and Intermediate Government Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lord Abbett and Intermediate Government
The main advantage of trading using opposite Lord Abbett and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government's long position.Lord Abbett vs. Dws Government Money | Lord Abbett vs. Counterpoint Tactical Municipal | Lord Abbett vs. Ab Impact Municipal | Lord Abbett vs. T Rowe Price |
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 CEOs Directory module to screen CEOs from public companies around the world.
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