Correlation Between American High and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both American High 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 American High and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income and Lord Abbett Short, you can compare the effects of market volatilities on American High 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 American High with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and Lord Abbett.
Diversification Opportunities for American High and Lord Abbett
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Lord is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding American High Income and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and American High 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 American High Income 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 Short has no effect on the direction of American High i.e., American High and Lord Abbett go up and down completely randomly.
Pair Corralation between American High and Lord Abbett
Assuming the 90 days horizon American High Income is expected to under-perform the Lord Abbett. In addition to that, American High is 1.13 times more volatile than Lord Abbett Short. It trades about -0.34 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about -0.38 per unit of volatility. If you would invest 1,001 in Lord Abbett Short on October 12, 2024 and sell it today you would lose (13.00) from holding Lord Abbett Short or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American High Income vs. Lord Abbett Short
Performance |
| Timeline |
| American High Income |
| Lord Abbett Short |
American High and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High and Lord Abbett
The main advantage of trading using opposite American High and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High 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.| American High vs. Arrow Managed Futures | American High vs. T Rowe Price | American High vs. Versatile Bond Portfolio | American High vs. T Rowe Price |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |