Correlation Between Lord Abbett and Blackrock Fundamental

Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Blackrock Fundamental 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 Blackrock Fundamental 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 Blackrock Fundamental Growth, you can compare the effects of market volatilities on Lord Abbett and Blackrock Fundamental 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 Blackrock Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Blackrock Fundamental.

Diversification Opportunities for Lord Abbett and Blackrock Fundamental

0.91

Correlation Coefficient

Lord Abbett  Blackrock Fundamental

Almost no diversification

The 3 months correlation between Lord and Blackrock is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Blackrock Fundamental Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Fundamental 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 Blackrock Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Fundamental has no effect on the direction of Lord Abbett i.e., Lord Abbett and Blackrock Fundamental go up and down completely randomly.

Pair Corralation between Lord Abbett and Blackrock Fundamental

Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.66 times more return on investment than Blackrock Fundamental. However, Lord Abbett Convertible is 1.51 times less risky than Blackrock Fundamental. It trades about 0.19 of its potential returns per unit of risk. Blackrock Fundamental Growth is currently generating about 0.12 per unit of risk. If you would invest  1,451  in Lord Abbett Convertible on September 17, 2024 and sell it today you would earn a total of  31.00  from holding Lord Abbett Convertible or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Lord Abbett Convertible  vs.  Blackrock Fundamental Growth

Lord Abbett Convertible

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Convertible are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blackrock Fundamental

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Fundamental Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Blackrock Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lord Abbett and Blackrock Fundamental

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

The idea behind Lord Abbett Convertible and Blackrock Fundamental Growth 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.