Correlation Between Lord Abbett and Multi Manager

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

By analyzing existing cross correlation between Lord Abbett Convertible and Multi Manager Directional Alternative, you can compare the effects of market volatilities on Lord Abbett and Multi Manager 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 Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Multi Manager.

Diversification Opportunities for Lord Abbett and Multi Manager

0.97

Correlation Coefficient

Lord Abbett  Multi Manager

Almost no diversification

The 3 months correlation between Lord and Multi is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Multi Manager Directional Alte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Direct 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 Convertible are associated (or correlated) with Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Direct has no effect on the direction of Lord Abbett i.e., Lord Abbett and Multi Manager go up and down completely randomly.

Pair Corralation between Lord Abbett and Multi Manager

Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 1.27 times more return on investment than Multi Manager. However, Lord Abbett is 1.27 times more volatile than Multi Manager Directional Alternative. It trades about 0.3 of its potential returns per unit of risk. Multi Manager Directional Alternative is currently generating about 0.28 per unit of risk. If you would invest  1,546  in Lord Abbett Convertible on July 8, 2025 and sell it today you would earn a total of  156.00  from holding Lord Abbett Convertible or generate 10.09% 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 Convertible  vs.  Multi Manager Directional Alte

Lord Abbett Convertible

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Convertible are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Multi Manager Direct

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Manager Directional Alternative are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multi Manager may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Lord Abbett and Multi Manager

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

The idea behind Lord Abbett Convertible and Multi Manager Directional Alternative 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.