Correlation Between Calvert Developed and Congressional Effect
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Congressional Effect 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 Developed and Congressional Effect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Developed Market and Congressional Effect Fund, you can compare the effects of market volatilities on Calvert Developed and Congressional Effect 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 Developed with a short position of Congressional Effect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Congressional Effect.
Diversification Opportunities for Calvert Developed and Congressional Effect
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and Congressional is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Congressional Effect Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congressional Effect and Calvert Developed 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 Developed Market are associated (or correlated) with Congressional Effect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congressional Effect has no effect on the direction of Calvert Developed i.e., Calvert Developed and Congressional Effect go up and down completely randomly.
Pair Corralation between Calvert Developed and Congressional Effect
Assuming the 90 days horizon Calvert Developed Market is expected to under-perform the Congressional Effect. In addition to that, Calvert Developed is 1.25 times more volatile than Congressional Effect Fund. It trades about -0.16 of its total potential returns per unit of risk. Congressional Effect Fund is currently generating about -0.04 per unit of volatility. If you would invest 1,167 in Congressional Effect Fund on August 29, 2024 and sell it today you would lose (7.00) from holding Congressional Effect Fund or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Calvert Developed Market vs. Congressional Effect Fund
Performance |
| Timeline |
| Calvert Developed Market |
| Congressional Effect |
Calvert Developed and Congressional Effect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Congressional Effect
The main advantage of trading using opposite Calvert Developed and Congressional Effect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Congressional Effect 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 Congressional Effect will offset losses from the drop in Congressional Effect's long position.| Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Developed Market | Calvert Developed vs. Calvert Mid Cap | Calvert Developed vs. Calvert Large Cap |
| Congressional Effect vs. Maryland Short Term Tax Free | Congressional Effect vs. Rbc Short Duration | Congressional Effect vs. Jhancock Short Duration | Congressional Effect vs. Quantitative Longshort Equity |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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