Correlation Between Calvert Short and Federated Short
Can any of the company-specific risk be diversified away by investing in both Calvert Short and Federated Short 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 Federated Short 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 Federated Short Term Income, you can compare the effects of market volatilities on Calvert Short and Federated Short 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 Federated Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Short and Federated Short.
Diversification Opportunities for Calvert Short and Federated Short
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Federated is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Short Duration and Federated Short Term Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Term 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 Federated Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Term has no effect on the direction of Calvert Short i.e., Calvert Short and Federated Short go up and down completely randomly.
Pair Corralation between Calvert Short and Federated Short
Assuming the 90 days horizon Calvert Short is expected to generate 2.29 times less return on investment than Federated Short. But when comparing it to its historical volatility, Calvert Short Duration is 1.42 times less risky than Federated Short. It trades about 0.15 of its potential returns per unit of risk. Federated Short Term Income is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 845.00 in Federated Short Term Income on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Federated Short Term Income or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Short Duration vs. Federated Short Term Income
Performance |
| Timeline |
| Calvert Short Duration |
| Federated Short Term |
Calvert Short and Federated Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Short and Federated Short
The main advantage of trading using opposite Calvert Short and Federated Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Short position performs unexpectedly, Federated Short 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 Federated Short will offset losses from the drop in Federated Short'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 |
| Federated Short vs. Franklin Growth Opportunities | Federated Short vs. Champlain Mid Cap | Federated Short vs. L Abbett Growth | Federated Short vs. Small Pany Growth |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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