Correlation Between Ab Bond and Calvert Income
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Calvert Income 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 Ab Bond and Calvert Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Calvert Income Fund, you can compare the effects of market volatilities on Ab Bond and Calvert Income 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 Ab Bond with a short position of Calvert Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Calvert Income.
Diversification Opportunities for Ab Bond and Calvert Income
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABNTX and Calvert is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Calvert Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Income and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Calvert Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Income has no effect on the direction of Ab Bond i.e., Ab Bond and Calvert Income go up and down completely randomly.
Pair Corralation between Ab Bond and Calvert Income
Assuming the 90 days horizon Ab Bond is expected to generate 1.36 times less return on investment than Calvert Income. But when comparing it to its historical volatility, Ab Bond Inflation is 1.48 times less risky than Calvert Income. It trades about 0.14 of its potential returns per unit of risk. Calvert Income Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,434 in Calvert Income Fund on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Calvert Income Fund or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Calvert Income Fund
Performance |
| Timeline |
| Ab Bond Inflation |
| Calvert Income |
Ab Bond and Calvert Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Calvert Income
The main advantage of trading using opposite Ab Bond and Calvert Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Calvert Income 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 Calvert Income will offset losses from the drop in Calvert Income's long position.| Ab Bond vs. Blackrock High Yield | Ab Bond vs. Pgim High Yield | Ab Bond vs. Goldman Sachs High | Ab Bond vs. Gmo High Yield |
| Calvert Income vs. Ab Bond Inflation | Calvert Income vs. Ab Bond Inflation | Calvert Income vs. Aqr Managed Futures | Calvert Income vs. Asg Managed Futures |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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