Correlation Between Catalyst Enhanced and Lord Abbett

Can any of the company-specific risk be diversified away by investing in both Catalyst Enhanced 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 Catalyst Enhanced and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalyst Enhanced Income and Lord Abbett Convertible, you can compare the effects of market volatilities on Catalyst Enhanced 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 Catalyst Enhanced with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Enhanced and Lord Abbett.

Diversification Opportunities for Catalyst Enhanced and Lord Abbett

-0.04

Correlation Coefficient

Catalyst Enhanced  Lord Abbett

Good diversification

The 3 months correlation between Catalyst and Lord is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Enhanced Income and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Catalyst Enhanced 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 Catalyst Enhanced 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 Convertible has no effect on the direction of Catalyst Enhanced i.e., Catalyst Enhanced and Lord Abbett go up and down completely randomly.

Pair Corralation between Catalyst Enhanced and Lord Abbett

Assuming the 90 days horizon Catalyst Enhanced is expected to generate 220.44 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Catalyst Enhanced Income is 1.08 times less risky than Lord Abbett. It trades about 0.0 of its potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  1,409  in Lord Abbett Convertible on April 25, 2025 and sell it today you would earn a total of  180.00  from holding Lord Abbett Convertible or generate 12.78% return on investment over 90 days.

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

Catalyst Enhanced Income  vs.  Lord Abbett Convertible

Catalyst Enhanced Income

Risk-Adjusted Performance

Weak

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

Lord Abbett Convertible

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Convertible are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Catalyst Enhanced and Lord Abbett

The main advantage of trading using opposite Catalyst Enhanced and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Enhanced 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 Catalyst Enhanced Income and Lord Abbett Convertible 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.