Correlation Between American Balanced and Calvert Balanced
Can any of the company-specific risk be diversified away by investing in both American Balanced and Calvert Balanced 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 Balanced 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 Balanced Portfolio, you can compare the effects of market volatilities on American Balanced and Calvert Balanced 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 Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Calvert Balanced.
Diversification Opportunities for American Balanced and Calvert Balanced
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Calvert is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and Calvert Balanced Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Balanced Por 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 Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Balanced Por has no effect on the direction of American Balanced i.e., American Balanced and Calvert Balanced go up and down completely randomly.
Pair Corralation between American Balanced and Calvert Balanced
Assuming the 90 days horizon American Balanced is expected to generate 1.11 times less return on investment than Calvert Balanced. But when comparing it to its historical volatility, American Balanced Fund is 1.06 times less risky than Calvert Balanced. It trades about 0.14 of its potential returns per unit of risk. Calvert Balanced Portfolio is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,225 in Calvert Balanced Portfolio on September 1, 2024 and sell it today you would earn a total of 480.00 from holding Calvert Balanced Portfolio or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
American Balanced Fund vs. Calvert Balanced Portfolio
Performance |
| Timeline |
| American Balanced |
| Calvert Balanced Por |
American Balanced and Calvert Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Calvert Balanced
The main advantage of trading using opposite American Balanced and Calvert Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Calvert Balanced 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 Balanced will offset losses from the drop in Calvert Balanced'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 Balanced vs. Calvert Developed Market | Calvert Balanced vs. Calvert Developed Market | Calvert Balanced vs. Calvert Short Duration | Calvert Balanced vs. Calvert International Responsible |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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