Correlation Between Calvert Conservative and American Beacon
Can any of the company-specific risk be diversified away by investing in both Calvert Conservative and American Beacon 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 Conservative and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Conservative Allocation and American Beacon Mid Cap, you can compare the effects of market volatilities on Calvert Conservative and American Beacon 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 Conservative with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and American Beacon.
Diversification Opportunities for Calvert Conservative and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Calvert and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and American Beacon Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Mid and Calvert Conservative 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 Conservative Allocation are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Mid has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and American Beacon go up and down completely randomly.
Pair Corralation between Calvert Conservative and American Beacon
If you would invest 1,531 in Calvert Conservative Allocation on September 14, 2024 and sell it today you would earn a total of 304.00 from holding Calvert Conservative Allocation or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Calvert Conservative Allocatio vs. American Beacon Mid Cap
Performance |
| Timeline |
| Calvert Conservative |
| American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Calvert Conservative and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Conservative and American Beacon
The main advantage of trading using opposite Calvert Conservative and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Conservative position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.The idea behind Calvert Conservative Allocation and American Beacon Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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