Correlation Between Lord Abbett and High Income
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and High Income 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 High Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Affiliated and High Income Fund, you can compare the effects of market volatilities on Lord Abbett and High Income 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 High Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and High Income.
Diversification Opportunities for Lord Abbett and High Income
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lord and High is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and High Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Income Fund 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 Affiliated are associated (or correlated) with High Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Income Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and High Income go up and down completely randomly.
Pair Corralation between Lord Abbett and High Income
Assuming the 90 days horizon Lord Abbett Affiliated is expected to under-perform the High Income. In addition to that, Lord Abbett is 8.48 times more volatile than High Income Fund. It trades about -0.25 of its total potential returns per unit of risk. High Income Fund is currently generating about 0.42 per unit of volatility. If you would invest 688.00 in High Income Fund on September 12, 2024 and sell it today you would earn a total of 7.00 from holding High Income Fund or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. High Income Fund
Performance |
| Timeline |
| Lord Abbett Affiliated |
| High Income Fund |
Lord Abbett and High Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and High Income
The main advantage of trading using opposite Lord Abbett and High Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, High Income 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 High Income will offset losses from the drop in High Income's long position.| Lord Abbett vs. Vanguard Value Index | Lord Abbett vs. Dodge Cox Stock | Lord Abbett vs. American Mutual Fund | Lord Abbett vs. American Funds American |
| High Income vs. Jhancock Disciplined Value | High Income vs. Lord Abbett Affiliated | High Income vs. Dana Large Cap | High Income vs. Large Cap Growth Profund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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