Correlation Between American Balanced and Calvert Moderate
Can any of the company-specific risk be diversified away by investing in both American Balanced and Calvert Moderate 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 American Balanced and Calvert Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and Calvert Moderate Allocation, you can compare the effects of market volatilities on American Balanced and Calvert Moderate 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 American Balanced with a short position of Calvert Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Calvert Moderate.
Diversification Opportunities for American Balanced and Calvert Moderate
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AMERICAN and Calvert is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and Calvert Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Moderate All and American Balanced 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 American Balanced Fund are associated (or correlated) with Calvert Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Moderate All has no effect on the direction of American Balanced i.e., American Balanced and Calvert Moderate go up and down completely randomly.
Pair Corralation between American Balanced and Calvert Moderate
Assuming the 90 days horizon American Balanced Fund is expected to generate 1.19 times more return on investment than Calvert Moderate. However, American Balanced is 1.19 times more volatile than Calvert Moderate Allocation. It trades about 0.12 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.1 per unit of risk. If you would invest 3,594 in American Balanced Fund on August 28, 2024 and sell it today you would earn a total of 49.00 from holding American Balanced Fund or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. Calvert Moderate Allocation
Performance |
| Timeline |
| American Balanced |
| Calvert Moderate All |
American Balanced and Calvert Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Calvert Moderate
The main advantage of trading using opposite American Balanced and Calvert Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Calvert Moderate 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 Moderate will offset losses from the drop in Calvert Moderate's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Calvert Moderate vs. Dodge Global Stock | Calvert Moderate vs. Ab Global Bond | Calvert Moderate vs. Morgan Stanley Global | Calvert Moderate vs. Us Global Investors |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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