Correlation Between Calvert Aggressive and American Beacon
Can any of the company-specific risk be diversified away by investing in both Calvert Aggressive and American Beacon 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 American Beacon 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 American Beacon Twentyfour, you can compare the effects of market volatilities on Calvert Aggressive and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Aggressive and American Beacon.
Diversification Opportunities for Calvert Aggressive and American Beacon
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and American is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Twen has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and American Beacon go up and down completely randomly.
Pair Corralation between Calvert Aggressive and American Beacon
Assuming the 90 days horizon Calvert Aggressive Allocation is expected to generate 7.18 times more return on investment than American Beacon. However, Calvert Aggressive is 7.18 times more volatile than American Beacon Twentyfour. It trades about 0.11 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.29 per unit of risk. If you would invest 2,357 in Calvert Aggressive Allocation on September 15, 2024 and sell it today you would earn a total of 476.00 from holding Calvert Aggressive Allocation or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Aggressive Allocation vs. American Beacon Twentyfour
Performance |
| Timeline |
| Calvert Aggressive |
| American Beacon Twen |
Calvert Aggressive and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Aggressive and American Beacon
The main advantage of trading using opposite Calvert Aggressive and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Aggressive position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Short Duration | Calvert Aggressive vs. Calvert International Responsible |
| American Beacon vs. Cutler Equity | American Beacon vs. Ms Global Fixed | American Beacon vs. Us Strategic Equity | American Beacon vs. Balanced Fund Retail |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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