Correlation Between First Eagle and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Overseas and Lord Abbett Developing, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Lord Abbett.
Diversification Opportunities for First Eagle and Lord Abbett
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Lord is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Overseas and Lord Abbett Developing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Developing and First Eagle 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 First Eagle Overseas 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 Developing has no effect on the direction of First Eagle i.e., First Eagle and Lord Abbett go up and down completely randomly.
Pair Corralation between First Eagle and Lord Abbett
Assuming the 90 days horizon First Eagle Overseas is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, First Eagle Overseas is 2.37 times less risky than Lord Abbett. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Lord Abbett Developing is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,960 in Lord Abbett Developing on September 25, 2024 and sell it today you would earn a total of 83.00 from holding Lord Abbett Developing or generate 2.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Eagle Overseas vs. Lord Abbett Developing
Performance |
Timeline |
First Eagle Overseas |
Lord Abbett Developing |
First Eagle and Lord Abbett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Eagle and Lord Abbett
The main advantage of trading using opposite First Eagle and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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.First Eagle vs. First Eagle Global | First Eagle vs. Calamos Growth Fund | First Eagle vs. First Eagle Value | First Eagle vs. First Eagle Gold |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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