Correlation Between Pin Oak and Lord Abbett

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

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

Diversification Opportunities for Pin Oak and Lord Abbett

0.61

Correlation Coefficient

Pin Oak  Lord Abbett

Poor diversification

The 3 months correlation between Pin and Lord is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pin Oak Equity and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Pin Oak 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 Pin Oak Equity 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 Growth has no effect on the direction of Pin Oak i.e., Pin Oak and Lord Abbett go up and down completely randomly.

Pair Corralation between Pin Oak and Lord Abbett

Assuming the 90 days horizon Pin Oak Equity is expected to under-perform the Lord Abbett. In addition to that, Pin Oak is 1.67 times more volatile than Lord Abbett Growth. It trades about -0.08 of its total potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.21 per unit of volatility. If you would invest  4,340  in Lord Abbett Growth on September 29, 2024 and sell it today you would earn a total of  785.00  from holding Lord Abbett Growth or generate 18.09% return on investment over 90 days.

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

Pin Oak Equity  vs.  Lord Abbett Growth

Pin Oak Equity

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Pin Oak Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Lord Abbett Growth

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lord Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pin Oak and Lord Abbett

The main advantage of trading using opposite Pin Oak and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pin Oak 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 Pin Oak Equity and Lord Abbett 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.