Correlation Between Calvert Income and Lord Abbett

Can any of the company-specific risk be diversified away by investing in both Calvert Income 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 Income 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 Income Fund and Lord Abbett Intermediate, you can compare the effects of market volatilities on Calvert Income 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 Income with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Income and Lord Abbett.

Diversification Opportunities for Calvert Income and Lord Abbett

0.88

Correlation Coefficient

Calvert Income  Lord Abbett

Very poor diversification

The 3 months correlation between Calvert and Lord is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Income Fund and Lord Abbett Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Intermediate and Calvert Income 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 Income Fund 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 Intermediate has no effect on the direction of Calvert Income i.e., Calvert Income and Lord Abbett go up and down completely randomly.

Pair Corralation between Calvert Income and Lord Abbett

Assuming the 90 days horizon Calvert Income Fund is expected to generate 2.02 times more return on investment than Lord Abbett. However, Calvert Income is 2.02 times more volatile than Lord Abbett Intermediate. It trades about 0.19 of its potential returns per unit of risk. Lord Abbett Intermediate is currently generating about 0.15 per unit of risk. If you would invest  1,482  in Calvert Income Fund on May 16, 2025 and sell it today you would earn a total of  47.00  from holding Calvert Income Fund or generate 3.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Calvert Income Fund  vs.  Lord Abbett Intermediate

Calvert Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Income Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Intermediate

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Intermediate are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Income and Lord Abbett

The main advantage of trading using opposite Calvert Income and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Income 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.

The idea behind Calvert Income Fund and Lord Abbett Intermediate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..