Correlation Between High Yield and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both 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 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 High Yield Portfolio and Lord Abbett Diversified, you can compare the effects of market volatilities on 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 High Yield with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Lord Abbett.
Diversification Opportunities for High Yield and Lord Abbett
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and Lord is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Portfolio and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and 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 High Yield Portfolio 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 Diversified has no effect on the direction of High Yield i.e., High Yield and Lord Abbett go up and down completely randomly.
Pair Corralation between High Yield and Lord Abbett
Assuming the 90 days horizon High Yield is expected to generate 2.38 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, High Yield Portfolio is 2.44 times less risky than Lord Abbett. It trades about 0.27 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,602 in Lord Abbett Diversified on November 3, 2024 and sell it today you would earn a total of 36.00 from holding Lord Abbett Diversified or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Portfolio vs. Lord Abbett Diversified
Performance |
| Timeline |
| High Yield Portfolio |
| Lord Abbett Diversified |
High Yield and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Lord Abbett
The main advantage of trading using opposite High Yield and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 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.| High Yield vs. Rational Strategic Allocation | High Yield vs. Qs Large Cap | High Yield vs. T Rowe Price | High Yield vs. Growth Portfolio Class |
| Lord Abbett vs. Invesco Gold Special | Lord Abbett vs. Global Gold Fund | Lord Abbett vs. Fidelity Advisor Gold | Lord Abbett vs. Great West Goldman Sachs |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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