Correlation Between Calvert Long-term and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Calvert Long-term and Akre Focus 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 Long-term and Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Long Term Income and Akre Focus Fund, you can compare the effects of market volatilities on Calvert Long-term and Akre Focus 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 Long-term with a short position of Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Long-term and Akre Focus.
Diversification Opportunities for Calvert Long-term and Akre Focus
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Akre is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Long Term Income and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund and Calvert Long-term 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 Long Term Income are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Calvert Long-term i.e., Calvert Long-term and Akre Focus go up and down completely randomly.
Pair Corralation between Calvert Long-term and Akre Focus
Assuming the 90 days horizon Calvert Long-term is expected to generate 2.62 times less return on investment than Akre Focus. But when comparing it to its historical volatility, Calvert Long Term Income is 3.55 times less risky than Akre Focus. It trades about 0.08 of its potential returns per unit of risk. Akre Focus Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,855 in Akre Focus Fund on October 23, 2024 and sell it today you would earn a total of 76.00 from holding Akre Focus Fund or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Long Term Income vs. Akre Focus Fund
Performance |
| Timeline |
| Calvert Long Term |
| Akre Focus Fund |
Calvert Long-term and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Long-term and Akre Focus
The main advantage of trading using opposite Calvert Long-term and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Long-term position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Calvert Long-term vs. Guggenheim Total Return | Calvert Long-term vs. Guggenheim Total Return | Calvert Long-term vs. Guggenheim Total Return | Calvert Long-term vs. Guggenheim Total Return |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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