Correlation Between Calvert Moderate and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate 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 Calvert Moderate and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Moderate Allocation and Lord Abbett Growth, you can compare the effects of market volatilities on Calvert Moderate 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 Calvert Moderate with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Lord Abbett.
Diversification Opportunities for Calvert Moderate and Lord Abbett
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Lord is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Calvert Moderate 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 Calvert Moderate Allocation 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 Growth has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Lord Abbett go up and down completely randomly.
Pair Corralation between Calvert Moderate and Lord Abbett
Assuming the 90 days horizon Calvert Moderate is expected to generate 2.88 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Calvert Moderate Allocation is 2.38 times less risky than Lord Abbett. It trades about 0.09 of its potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,957 in Lord Abbett Growth on September 15, 2024 and sell it today you would earn a total of 901.00 from holding Lord Abbett Growth or generate 46.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Lord Abbett Growth
Performance |
| Timeline |
| Calvert Moderate All |
| Lord Abbett Growth |
Calvert Moderate and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Lord Abbett
The main advantage of trading using opposite Calvert Moderate and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate 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.| Calvert Moderate vs. Extended Market Index | Calvert Moderate vs. T Rowe Price | Calvert Moderate vs. Kinetics Market Opportunities | Calvert Moderate vs. Calvert Developed Market |
| Lord Abbett vs. Qs Moderate Growth | Lord Abbett vs. Wilmington Trust Retirement | Lord Abbett vs. Sierra E Retirement | Lord Abbett vs. Calvert Moderate Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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