Correlation Between California High-yield and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both California High-yield 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 California High-yield and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Lord Abbett Alpha, you can compare the effects of market volatilities on California High-yield 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 California High-yield with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Lord Abbett.
Diversification Opportunities for California High-yield and Lord Abbett
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between California and Lord is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Lord Abbett Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Alpha and California High-yield 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 California High Yield Municipal 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 Alpha has no effect on the direction of California High-yield i.e., California High-yield and Lord Abbett go up and down completely randomly.
Pair Corralation between California High-yield and Lord Abbett
Assuming the 90 days horizon California High-yield is expected to generate 5.69 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, California High Yield Municipal is 3.67 times less risky than Lord Abbett. It trades about 0.19 of its potential returns per unit of risk. Lord Abbett Alpha is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,704 in Lord Abbett Alpha on September 1, 2024 and sell it today you would earn a total of 218.00 from holding Lord Abbett Alpha or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
California High Yield Municipa vs. Lord Abbett Alpha
Performance |
| Timeline |
| California High Yield |
| Lord Abbett Alpha |
California High-yield and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Lord Abbett
The main advantage of trading using opposite California High-yield and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield 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.| California High-yield vs. Equity Growth Fund | California High-yield vs. Income Growth Fund | California High-yield vs. Diversified Bond Fund | California High-yield vs. Emerging Markets Fund |
| Lord Abbett vs. T Rowe Price | Lord Abbett vs. Blrc Sgy Mnp | Lord Abbett vs. Oklahoma Municipal Fund | Lord Abbett vs. Thrivent Income 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |