Correlation Between Calvert Global and American Balanced
Can any of the company-specific risk be diversified away by investing in both Calvert Global and American Balanced 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 Global and American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Global Energy and American Balanced Fund, you can compare the effects of market volatilities on Calvert Global and American Balanced 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 Global with a short position of American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and American Balanced.
Diversification Opportunities for Calvert Global and American Balanced
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Calvert and American is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced and Calvert Global 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 Global Energy are associated (or correlated) with American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Calvert Global i.e., Calvert Global and American Balanced go up and down completely randomly.
Pair Corralation between Calvert Global and American Balanced
Assuming the 90 days horizon Calvert Global is expected to generate 3.52 times less return on investment than American Balanced. In addition to that, Calvert Global is 1.96 times more volatile than American Balanced Fund. It trades about 0.02 of its total potential returns per unit of risk. American Balanced Fund is currently generating about 0.15 per unit of volatility. If you would invest 3,054 in American Balanced Fund on September 4, 2024 and sell it today you would earn a total of 645.00 from holding American Balanced Fund or generate 21.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Calvert Global Energy vs. American Balanced Fund
Performance |
| Timeline |
| Calvert Global Energy |
| American Balanced |
Calvert Global and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Global and American Balanced
The main advantage of trading using opposite Calvert Global and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, American Balanced 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 Balanced will offset losses from the drop in American Balanced's long position.| Calvert Global vs. Ashmore Emerging Markets | Calvert Global vs. Wells Fargo Funds | Calvert Global vs. Lord Abbett Emerging | Calvert Global vs. Elfun Government Money |
| American Balanced vs. American Funds 2015 | American Balanced vs. American Mutual Fund | American Balanced vs. American Funds Income | American Balanced vs. American Funds Preservation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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