Correlation Between Absolute Convertible and Calvert Bond
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Calvert Bond 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 Absolute Convertible and Calvert Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Calvert Bond Portfolio, you can compare the effects of market volatilities on Absolute Convertible and Calvert Bond 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 Absolute Convertible with a short position of Calvert Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Calvert Bond.
Diversification Opportunities for Absolute Convertible and Calvert Bond
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Absolute and Calvert is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Calvert Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Bond Portfolio and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Calvert Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Bond Portfolio has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Calvert Bond go up and down completely randomly.
Pair Corralation between Absolute Convertible and Calvert Bond
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.3 times more return on investment than Calvert Bond. However, Absolute Convertible Arbitrage is 3.36 times less risky than Calvert Bond. It trades about 0.14 of its potential returns per unit of risk. Calvert Bond Portfolio is currently generating about 0.03 per unit of risk. If you would invest 1,032 in Absolute Convertible Arbitrage on October 16, 2024 and sell it today you would earn a total of 87.00 from holding Absolute Convertible Arbitrage or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Calvert Bond Portfolio
Performance |
| Timeline |
| Absolute Convertible |
| Calvert Bond Portfolio |
Absolute Convertible and Calvert Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Calvert Bond
The main advantage of trading using opposite Absolute Convertible and Calvert Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Calvert Bond 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 Bond will offset losses from the drop in Calvert Bond's long position.| Absolute Convertible vs. Legg Mason Global | Absolute Convertible vs. Rbb Fund Trust | Absolute Convertible vs. Barings Global Floating | Absolute Convertible vs. Morningstar Global Income |
| Calvert Bond vs. Rationalpier 88 Convertible | Calvert Bond vs. Absolute Convertible Arbitrage | Calvert Bond vs. Allianzgi Convertible Income | Calvert Bond vs. Virtus Convertible |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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