Correlation Between Usa Mutuals and Lord Abbett

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

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

Diversification Opportunities for Usa Mutuals and Lord Abbett

-0.39

Correlation Coefficient

Usa Mutuals  Lord Abbett

Very good diversification

The 3 months correlation between Usa and Lord is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Usa Mutuals Vice and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Usa Mutuals 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 Usa Mutuals Vice 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 Convertible has no effect on the direction of Usa Mutuals i.e., Usa Mutuals and Lord Abbett go up and down completely randomly.

Pair Corralation between Usa Mutuals and Lord Abbett

Assuming the 90 days horizon Usa Mutuals Vice is expected to under-perform the Lord Abbett. In addition to that, Usa Mutuals is 1.4 times more volatile than Lord Abbett Convertible. It trades about -0.03 of its total potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.08 per unit of volatility. If you would invest  1,181  in Lord Abbett Convertible on September 28, 2024 and sell it today you would earn a total of  281.00  from holding Lord Abbett Convertible or generate 23.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Usa Mutuals Vice  vs.  Lord Abbett Convertible

Usa Mutuals Vice

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usa Mutuals Vice 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 Convertible

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Convertible are ranked lower than 11 (%) 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.

Pair Trading with Usa Mutuals and Lord Abbett

The main advantage of trading using opposite Usa Mutuals and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usa Mutuals 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 Usa Mutuals Vice and Lord Abbett Convertible 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.