Correlation Between Calvert Moderate and American Funds
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate 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 Moderate 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 Moderate Allocation and American Funds Strategic, you can compare the effects of market volatilities on Calvert Moderate 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 Moderate with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and American Funds.
Diversification Opportunities for Calvert Moderate and American Funds
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and American is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and American Funds Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Strategic 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 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 Strategic has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and American Funds go up and down completely randomly.
Pair Corralation between Calvert Moderate and American Funds
Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 1.18 times more return on investment than American Funds. However, Calvert Moderate is 1.18 times more volatile than American Funds Strategic. It trades about 0.35 of its potential returns per unit of risk. American Funds Strategic is currently generating about 0.08 per unit of risk. If you would invest 2,068 in Calvert Moderate Allocation on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Calvert Moderate Allocation or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. American Funds Strategic
Performance |
| Timeline |
| Calvert Moderate All |
| American Funds Strategic |
Calvert Moderate and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and American Funds
The main advantage of trading using opposite Calvert Moderate and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate 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 Moderate vs. Calvert Developed Market | Calvert Moderate vs. Calvert Developed Market | Calvert Moderate vs. Calvert Short Duration | Calvert Moderate vs. Calvert International Responsible |
| American Funds vs. Goldman Sachs Short Term | American Funds vs. Federated Ultrashort Bond | American Funds vs. Ab Select Longshort | American Funds vs. Franklin Federal Limited Term |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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