Correlation Between Calvert Short and American Funds
Can any of the company-specific risk be diversified away by investing in both Calvert Short and American Funds 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 American Funds 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 American Funds 2010, you can compare the effects of market volatilities on Calvert Short and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Short and American Funds.
Diversification Opportunities for Calvert Short and American Funds
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and AMERICAN is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Short Duration and American Funds 2010 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2010 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2010 has no effect on the direction of Calvert Short i.e., Calvert Short and American Funds go up and down completely randomly.
Pair Corralation between Calvert Short and American Funds
Assuming the 90 days horizon Calvert Short is expected to generate 1.39 times less return on investment than American Funds. But when comparing it to its historical volatility, Calvert Short Duration is 2.19 times less risky than American Funds. It trades about 0.13 of its potential returns per unit of risk. American Funds 2010 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,070 in American Funds 2010 on September 3, 2024 and sell it today you would earn a total of 162.00 from holding American Funds 2010 or generate 15.14% 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. American Funds 2010
Performance |
| Timeline |
| Calvert Short Duration |
| American Funds 2010 |
Calvert Short and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Short and American Funds
The main advantage of trading using opposite Calvert Short and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Short position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' 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 |
| American Funds vs. Locorr Longshort Modities | American Funds vs. Old Westbury Short Term | American Funds vs. Calvert Short Duration | American Funds vs. Touchstone Ultra Short |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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