Correlation Between Lord Abbett and High Yield
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and High Yield 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 Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Intermediate and High Yield Portfolio, you can compare the effects of market volatilities on Lord Abbett and High Yield 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 Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and High Yield.
Diversification Opportunities for Lord Abbett and High Yield
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and High is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intermediate and High Yield Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Portfolio 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 Intermediate are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Portfolio has no effect on the direction of Lord Abbett i.e., Lord Abbett and High Yield go up and down completely randomly.
Pair Corralation between Lord Abbett and High Yield
Assuming the 90 days horizon Lord Abbett is expected to generate 5.3 times less return on investment than High Yield. But when comparing it to its historical volatility, Lord Abbett Intermediate is 1.03 times less risky than High Yield. It trades about 0.06 of its potential returns per unit of risk. High Yield Portfolio is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 849.00 in High Yield Portfolio on October 24, 2024 and sell it today you would earn a total of 9.00 from holding High Yield Portfolio or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Intermediate vs. High Yield Portfolio
Performance |
| Timeline |
| Lord Abbett Intermediate |
| High Yield Portfolio |
Lord Abbett and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and High Yield
The main advantage of trading using opposite Lord Abbett and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, High Yield 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 Yield will offset losses from the drop in High Yield's long position.| Lord Abbett vs. Baillie Gifford Health | Lord Abbett vs. Eventide Healthcare Life | Lord Abbett vs. Lord Abbett Health | Lord Abbett vs. Allianzgi Health Sciences |
| High Yield vs. Us Government Securities | High Yield vs. Franklin Adjustable Government | High Yield vs. Ridgeworth Seix Government | High Yield vs. Voya Government Money |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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