Correlation Between Calvert Aggressive and Calvert Balanced
Can any of the company-specific risk be diversified away by investing in both Calvert Aggressive 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 Calvert Aggressive and Calvert Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Aggressive Allocation and Calvert Balanced Portfolio, you can compare the effects of market volatilities on Calvert Aggressive 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 Calvert Aggressive with a short position of Calvert Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Aggressive and Calvert Balanced.
Diversification Opportunities for Calvert Aggressive and Calvert Balanced
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and Calvert is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation 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 Calvert Aggressive 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 Calvert Aggressive Allocation 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 Calvert Aggressive i.e., Calvert Aggressive and Calvert Balanced go up and down completely randomly.
Pair Corralation between Calvert Aggressive and Calvert Balanced
Assuming the 90 days horizon Calvert Aggressive Allocation is expected to under-perform the Calvert Balanced. In addition to that, Calvert Aggressive is 1.36 times more volatile than Calvert Balanced Portfolio. It trades about -0.09 of its total potential returns per unit of risk. Calvert Balanced Portfolio is currently generating about -0.08 per unit of volatility. If you would invest 4,348 in Calvert Balanced Portfolio on January 15, 2025 and sell it today you would lose (137.00) from holding Calvert Balanced Portfolio or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Aggressive Allocation vs. Calvert Balanced Portfolio
Performance |
| Timeline |
| Calvert Aggressive |
| Calvert Balanced Por |
Calvert Aggressive and Calvert Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Aggressive and Calvert Balanced
The main advantage of trading using opposite Calvert Aggressive and Calvert Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Aggressive 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.| Calvert Aggressive vs. Franklin Mutual Shares | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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