Correlation Between Lord Abbett and Federated High
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Federated High 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 Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Small and Federated High Yield, you can compare the effects of market volatilities on Lord Abbett and Federated High 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 Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Federated High.
Diversification Opportunities for Lord Abbett and Federated High
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Federated is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield 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 Small are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated High go up and down completely randomly.
Pair Corralation between Lord Abbett and Federated High
Assuming the 90 days horizon Lord Abbett Small is expected to generate 5.91 times more return on investment than Federated High. However, Lord Abbett is 5.91 times more volatile than Federated High Yield. It trades about 0.17 of its potential returns per unit of risk. Federated High Yield is currently generating about 0.32 per unit of risk. If you would invest 1,916 in Lord Abbett Small on May 30, 2025 and sell it today you would earn a total of 236.00 from holding Lord Abbett Small or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Federated High Yield
Performance |
| Timeline |
| Lord Abbett Small |
| Federated High Yield |
Lord Abbett and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Federated High
The main advantage of trading using opposite Lord Abbett and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| Lord Abbett vs. Qs Moderate Growth | Lord Abbett vs. Needham Aggressive Growth | Lord Abbett vs. Mairs Power Growth | Lord Abbett vs. Auer Growth Fund |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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