Correlation Between Performance Trust and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Performance Trust 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 Performance Trust and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Trust Strategic and Lord Abbett Bond, you can compare the effects of market volatilities on Performance Trust 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 Performance Trust with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Lord Abbett.
Diversification Opportunities for Performance Trust and Lord Abbett
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Lord is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Performance Trust 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 Performance Trust Strategic 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 Bond has no effect on the direction of Performance Trust i.e., Performance Trust and Lord Abbett go up and down completely randomly.
Pair Corralation between Performance Trust and Lord Abbett
Assuming the 90 days horizon Performance Trust Strategic is expected to under-perform the Lord Abbett. In addition to that, Performance Trust is 1.26 times more volatile than Lord Abbett Bond. It trades about -0.21 of its total potential returns per unit of risk. Lord Abbett Bond is currently generating about -0.15 per unit of volatility. If you would invest 703.00 in Lord Abbett Bond on January 25, 2024 and sell it today you would lose (6.00) from holding Lord Abbett Bond or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Trust Strategic vs. Lord Abbett Bond
Performance |
| Timeline |
| Performance Trust |
| Lord Abbett Bond |
Performance Trust and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Trust and Lord Abbett
The main advantage of trading using opposite Performance Trust and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust 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.| Performance Trust vs. Alphacentric Income Opportunities | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Guggenheim Total Return | Performance Trust vs. Pimco Income Fund |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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