Correlation Between Lord Abbett and Income Stock
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Income Stock 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 Income Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett High and Income Stock Fund, you can compare the effects of market volatilities on Lord Abbett and Income Stock 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 Income Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Income Stock.
Diversification Opportunities for Lord Abbett and Income Stock
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Income is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High and Income Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Stock 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 High are associated (or correlated) with Income Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Stock has no effect on the direction of Lord Abbett i.e., Lord Abbett and Income Stock go up and down completely randomly.
Pair Corralation between Lord Abbett and Income Stock
Assuming the 90 days horizon Lord Abbett is expected to generate 1.85 times less return on investment than Income Stock. But when comparing it to its historical volatility, Lord Abbett High is 3.15 times less risky than Income Stock. It trades about 0.22 of its potential returns per unit of risk. Income Stock Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,750 in Income Stock Fund on August 25, 2024 and sell it today you would earn a total of 430.00 from holding Income Stock Fund or generate 24.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett High vs. Income Stock Fund
Performance |
| Timeline |
| Lord Abbett High |
| Income Stock |
Lord Abbett and Income Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Income Stock
The main advantage of trading using opposite Lord Abbett and Income Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Income Stock 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 Income Stock will offset losses from the drop in Income Stock's long position.| Lord Abbett vs. Ishares Municipal Bond | Lord Abbett vs. Bbh Intermediate Municipal | Lord Abbett vs. Pace Municipal Fixed | Lord Abbett vs. T Rowe Price |
| Income Stock vs. Dunham High Yield | Income Stock vs. Pioneer High Yield | Income Stock vs. Pimco High Yield | Income Stock vs. Lord Abbett High |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |