Correlation Between Lord Abbett and International Government
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and International Government 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 Lord Abbett and International Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Diversified and International Government Bond, you can compare the effects of market volatilities on Lord Abbett and International Government 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 Lord Abbett with a short position of International Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and International Government.
Diversification Opportunities for Lord Abbett and International Government
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and International is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and International Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Government and Lord Abbett 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 Lord Abbett Diversified are associated (or correlated) with International Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Government has no effect on the direction of Lord Abbett i.e., Lord Abbett and International Government go up and down completely randomly.
Pair Corralation between Lord Abbett and International Government
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 0.86 times more return on investment than International Government. However, Lord Abbett Diversified is 1.16 times less risky than International Government. It trades about 0.33 of its potential returns per unit of risk. International Government Bond is currently generating about 0.1 per unit of risk. If you would invest 1,579 in Lord Abbett Diversified on April 24, 2025 and sell it today you would earn a total of 91.00 from holding Lord Abbett Diversified or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. International Government Bond
Performance |
| Timeline |
| Lord Abbett Diversified |
| International Government |
Lord Abbett and International Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and International Government
The main advantage of trading using opposite Lord Abbett and International Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, International Government 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 International Government will offset losses from the drop in International Government's long position.| Lord Abbett vs. Franklin Government Securities | Lord Abbett vs. Inverse Government Long | Lord Abbett vs. Dunham Porategovernment Bond | Lord Abbett vs. Voya Government Money |
| International Government vs. Msift High Yield | International Government vs. Lord Abbett Short | International Government vs. Strategic Advisers Income | International Government vs. Transamerica High Yield |
Check out your portfolio center.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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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