Correlation Between Lord Abbett and Segall Bryant

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

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

Diversification Opportunities for Lord Abbett and Segall Bryant

0.74

Correlation Coefficient

Lord Abbett  Segall Bryant

Poor diversification

The 3 months correlation between Lord and Segall is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Segall Bryant Hamill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segall Bryant Hamill 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 Short are associated (or correlated) with Segall Bryant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segall Bryant Hamill has no effect on the direction of Lord Abbett i.e., Lord Abbett and Segall Bryant go up and down completely randomly.

Pair Corralation between Lord Abbett and Segall Bryant

Assuming the 90 days horizon Lord Abbett Short is expected to generate 1.64 times more return on investment than Segall Bryant. However, Lord Abbett is 1.64 times more volatile than Segall Bryant Hamill. It trades about 0.06 of its potential returns per unit of risk. Segall Bryant Hamill is currently generating about 0.09 per unit of risk. If you would invest  386.00  in Lord Abbett Short on September 1, 2024 and sell it today you would earn a total of  2.00  from holding Lord Abbett Short or generate 0.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Lord Abbett Short  vs.  Segall Bryant Hamill

Lord Abbett Short

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Short are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Segall Bryant Hamill

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Segall Bryant Hamill are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Segall Bryant 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 Segall Bryant

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

The idea behind Lord Abbett Short and Segall Bryant Hamill 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.