Correlation Between Calvert Long and Lord Abbett

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

Diversification Opportunities for Calvert Long and Lord Abbett

0.72

Correlation Coefficient

Calvert Long  Lord Abbett

Poor diversification

The 3 months correlation between Calvert and Lord is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Long Term Income and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Calvert Long 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 Long Term Income 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 Short has no effect on the direction of Calvert Long i.e., Calvert Long and Lord Abbett go up and down completely randomly.

Pair Corralation between Calvert Long and Lord Abbett

Assuming the 90 days horizon Calvert Long is expected to generate 22.06 times less return on investment than Lord Abbett. In addition to that, Calvert Long is 1.29 times more volatile than Lord Abbett Short. It trades about 0.01 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about 0.35 per unit of volatility. If you would invest  936.00  in Lord Abbett Short on April 30, 2025 and sell it today you would earn a total of  45.00  from holding Lord Abbett Short or generate 4.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Calvert Long Term Income  vs.  Lord Abbett Short

Calvert Long Term

Risk-Adjusted Performance

Weak

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

Lord Abbett Short

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Short are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Long and Lord Abbett

The main advantage of trading using opposite Calvert Long and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Long 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 Long Term Income and Lord Abbett Short 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.