Correlation Between Lord Abbett and State Street

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

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

Diversification Opportunities for Lord Abbett and State Street

0.91

Correlation Coefficient

Lord Abbett  State Street

Almost no diversification

The 3 months correlation between Lord and State is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Emerging and State Street Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Premier and Lord Abbett 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 Lord Abbett Emerging are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Premier has no effect on the direction of Lord Abbett i.e., Lord Abbett and State Street go up and down completely randomly.

Pair Corralation between Lord Abbett and State Street

Assuming the 90 days horizon Lord Abbett Emerging is expected to generate 0.95 times more return on investment than State Street. However, Lord Abbett Emerging is 1.06 times less risky than State Street. It trades about 0.25 of its potential returns per unit of risk. State Street Premier is currently generating about 0.19 per unit of risk. If you would invest  1,811  in Lord Abbett Emerging on July 10, 2025 and sell it today you would earn a total of  201.00  from holding Lord Abbett Emerging or generate 11.1% return on investment over 90 days.

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

Lord Abbett Emerging  vs.  State Street Premier

Lord Abbett Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Emerging are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in November 2025.

State Street Premier

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in State Street Premier are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, State Street may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Lord Abbett and State Street

The main advantage of trading using opposite Lord Abbett and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.

The idea behind Lord Abbett Emerging and State Street Premier 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.