Correlation Between Calvert Developed and Horizon Defensive
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Horizon Defensive 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 Horizon Defensive 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 Horizon Defensive Equity, you can compare the effects of market volatilities on Calvert Developed and Horizon Defensive 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 Horizon Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Horizon Defensive.
Diversification Opportunities for Calvert Developed and Horizon Defensive
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calvert and Horizon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Horizon Defensive Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defensive Equity 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 Horizon Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defensive Equity has no effect on the direction of Calvert Developed i.e., Calvert Developed and Horizon Defensive go up and down completely randomly.
Pair Corralation between Calvert Developed and Horizon Defensive
Assuming the 90 days horizon Calvert Developed Market is expected to generate 1.07 times more return on investment than Horizon Defensive. However, Calvert Developed is 1.07 times more volatile than Horizon Defensive Equity. It trades about 0.2 of its potential returns per unit of risk. Horizon Defensive Equity is currently generating about 0.07 per unit of risk. If you would invest 3,083 in Calvert Developed Market on September 13, 2024 and sell it today you would earn a total of 68.00 from holding Calvert Developed Market or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. Horizon Defensive Equity
Performance |
| Timeline |
| Calvert Developed Market |
| Horizon Defensive Equity |
Calvert Developed and Horizon Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Horizon Defensive
The main advantage of trading using opposite Calvert Developed and Horizon Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Horizon Defensive 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 Horizon Defensive will offset losses from the drop in Horizon Defensive's long position.| Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Mid Cap | Calvert Developed vs. Calvert Short Duration |
| Horizon Defensive vs. Thrivent Natural Resources | Horizon Defensive vs. Fidelity Advisor Energy | Horizon Defensive vs. Calvert Global Energy | Horizon Defensive vs. Jennison Natural Resources |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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