Correlation Between Arrow Managed and Lord Abbett

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

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

Diversification Opportunities for Arrow Managed and Lord Abbett

0.2

Correlation Coefficient

Arrow Managed  Lord Abbett

Modest diversification

The 3 months correlation between Arrow and Lord is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global and Arrow Managed 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 Arrow Managed Futures 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 Global has no effect on the direction of Arrow Managed i.e., Arrow Managed and Lord Abbett go up and down completely randomly.

Pair Corralation between Arrow Managed and Lord Abbett

Assuming the 90 days horizon Arrow Managed is expected to generate 33.78 times less return on investment than Lord Abbett. In addition to that, Arrow Managed is 1.85 times more volatile than Lord Abbett Global. It trades about 0.0 of its total potential returns per unit of risk. Lord Abbett Global is currently generating about 0.09 per unit of volatility. If you would invest  1,153  in Lord Abbett Global on September 21, 2024 and sell it today you would earn a total of  512.00  from holding Lord Abbett Global or generate 44.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Arrow Managed Futures  vs.  Lord Abbett Global

Arrow Managed Futures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arrow Managed Futures has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Arrow Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Arrow Managed and Lord Abbett

The main advantage of trading using opposite Arrow Managed and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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 Arrow Managed Futures and Lord Abbett Global 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.