Correlation Between Calvert International and Lord Abbett

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

Diversification Opportunities for Calvert International and Lord Abbett

0.26

Correlation Coefficient

Calvert International  Lord Abbett

Modest diversification

The 3 months correlation between Calvert and Lord is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Calvert International Equity and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and Calvert International 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 International Equity 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 Small has no effect on the direction of Calvert International i.e., Calvert International and Lord Abbett go up and down completely randomly.

Pair Corralation between Calvert International and Lord Abbett

Assuming the 90 days horizon Calvert International Equity is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert International Equity is 1.36 times less risky than Lord Abbett. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Lord Abbett Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,035  in Lord Abbett Small on June 29, 2025 and sell it today you would earn a total of  68.00  from holding Lord Abbett Small or generate 3.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Calvert International Equity  vs.  Lord Abbett Small

Calvert International

Risk-Adjusted Performance

Weakest

Over the last 90 days Calvert International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Calvert International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Small

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Small are ranked lower than 4 (%) 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 International and Lord Abbett

The main advantage of trading using opposite Calvert International and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert International 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 International Equity and Lord Abbett Small 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.