Correlation Between Calvert Moderate and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Wells Fargo 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 Wells Fargo 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 Wells Fargo Omega, you can compare the effects of market volatilities on Calvert Moderate and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Wells Fargo.
Diversification Opportunities for Calvert Moderate and Wells Fargo
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and Wells is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Wells Fargo Omega in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Omega 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Omega has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Wells Fargo go up and down completely randomly.
Pair Corralation between Calvert Moderate and Wells Fargo
Assuming the 90 days horizon Calvert Moderate is expected to generate 2.44 times less return on investment than Wells Fargo. But when comparing it to its historical volatility, Calvert Moderate Allocation is 1.85 times less risky than Wells Fargo. It trades about 0.07 of its potential returns per unit of risk. Wells Fargo Omega is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,445 in Wells Fargo Omega on September 14, 2024 and sell it today you would earn a total of 1,555 from holding Wells Fargo Omega or generate 45.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.38% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Wells Fargo Omega
Performance |
| Timeline |
| Calvert Moderate All |
| Wells Fargo Omega |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Calvert Moderate and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Wells Fargo
The main advantage of trading using opposite Calvert Moderate and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Calvert Moderate vs. Oil Gas Ultrasector | Calvert Moderate vs. Firsthand Alternative Energy | Calvert Moderate vs. Hennessy Bp Energy | Calvert Moderate vs. Franklin Natural Resources |
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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 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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