Correlation Between Calvert Short and Capital Management
Can any of the company-specific risk be diversified away by investing in both Calvert Short and Capital Management 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 Short and Capital Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Short Duration and Capital Management Mid Cap, you can compare the effects of market volatilities on Calvert Short and Capital Management 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 Short with a short position of Capital Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Short and Capital Management.
Diversification Opportunities for Calvert Short and Capital Management
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and Capital is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Short Duration and Capital Management Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Management Mid and Calvert Short 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 Short Duration are associated (or correlated) with Capital Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Management Mid has no effect on the direction of Calvert Short i.e., Calvert Short and Capital Management go up and down completely randomly.
Pair Corralation between Calvert Short and Capital Management
Assuming the 90 days horizon Calvert Short Duration is expected to generate 0.14 times more return on investment than Capital Management. However, Calvert Short Duration is 6.9 times less risky than Capital Management. It trades about 0.06 of its potential returns per unit of risk. Capital Management Mid Cap is currently generating about -0.2 per unit of risk. If you would invest 1,556 in Calvert Short Duration on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Calvert Short Duration or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Short Duration vs. Capital Management Mid Cap
Performance |
| Timeline |
| Calvert Short Duration |
| Capital Management Mid |
Calvert Short and Capital Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Short and Capital Management
The main advantage of trading using opposite Calvert Short and Capital Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Short position performs unexpectedly, Capital Management 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 Capital Management will offset losses from the drop in Capital Management's long position.| Calvert Short vs. Calvert Short Duration | Calvert Short vs. Calvert Short Duration | Calvert Short vs. Calvert Income Fund | Calvert Short vs. Calvert Long Term Income |
| Capital Management vs. Legg Mason Bw | Capital Management vs. Northern Small Cap | Capital Management vs. Principal Lifetime Hybrid | Capital Management vs. The Gabelli Small |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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