Correlation Between Calvert Emerging and Lord Abbett

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

Diversification Opportunities for Calvert Emerging and Lord Abbett

0.62

Correlation Coefficient

Calvert Emerging  Lord Abbett

Poor diversification

The 3 months correlation between Calvert and Lord is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets 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 Emerging 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 Emerging Markets 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 Emerging i.e., Calvert Emerging and Lord Abbett go up and down completely randomly.

Pair Corralation between Calvert Emerging and Lord Abbett

Assuming the 90 days horizon Calvert Emerging Markets is expected to generate 5.57 times more return on investment than Lord Abbett. However, Calvert Emerging is 5.57 times more volatile than Lord Abbett Intermediate. It trades about 0.12 of its potential returns per unit of risk. Lord Abbett Intermediate is currently generating about 0.16 per unit of risk. If you would invest  1,838  in Calvert Emerging Markets on May 14, 2025 and sell it today you would earn a total of  99.00  from holding Calvert Emerging Markets or generate 5.39% return on investment over 90 days.

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

Calvert Emerging Markets  vs.  Lord Abbett Intermediate

Calvert Emerging Markets

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Emerging Markets are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Emerging 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Intermediate are ranked lower than 12 (%) 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 Emerging and Lord Abbett

The main advantage of trading using opposite Calvert Emerging and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging 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 Emerging Markets 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.