Correlation Between Calvert Moderate and American Beacon
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate 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 Moderate 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 Moderate Allocation and American Beacon Intl, you can compare the effects of market volatilities on Calvert Moderate 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 Moderate with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and American Beacon.
Diversification Opportunities for Calvert Moderate and American Beacon
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and American is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and American Beacon Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Intl and Calvert Moderate 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 Moderate 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 Intl has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and American Beacon go up and down completely randomly.
Pair Corralation between Calvert Moderate and American Beacon
Assuming the 90 days horizon Calvert Moderate is expected to generate 2.22 times less return on investment than American Beacon. But when comparing it to its historical volatility, Calvert Moderate Allocation is 1.58 times less risky than American Beacon. It trades about 0.21 of its potential returns per unit of risk. American Beacon Intl is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,511 in American Beacon Intl on November 5, 2024 and sell it today you would earn a total of 73.00 from holding American Beacon Intl or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. American Beacon Intl
Performance |
| Timeline |
| Calvert Moderate All |
| American Beacon Intl |
Calvert Moderate and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and American Beacon
The main advantage of trading using opposite Calvert Moderate and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate 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.| Calvert Moderate vs. Gmo Global Equity | Calvert Moderate vs. Transamerica International Equity | Calvert Moderate vs. Aqr Equity Market | Calvert Moderate vs. Artisan Select Equity |
| American Beacon vs. Rbc Bluebay Global | American Beacon vs. Chartwell Short Duration | American Beacon vs. Ironclad Managed Risk | American Beacon vs. Gmo High Yield |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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