Correlation Between Calvert Moderate and Pro Blend
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Pro Blend 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 Pro Blend 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 Pro Blend Moderate Term, you can compare the effects of market volatilities on Calvert Moderate and Pro Blend 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 Pro Blend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Pro Blend.
Diversification Opportunities for Calvert Moderate and Pro Blend
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Pro is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Blend Moderate 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 Pro Blend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Blend Moderate has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Pro Blend go up and down completely randomly.
Pair Corralation between Calvert Moderate and Pro Blend
Assuming the 90 days horizon Calvert Moderate is expected to generate 1.01 times less return on investment than Pro Blend. In addition to that, Calvert Moderate is 1.45 times more volatile than Pro Blend Moderate Term. It trades about 0.08 of its total potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.12 per unit of volatility. If you would invest 1,295 in Pro Blend Moderate Term on September 12, 2024 and sell it today you would earn a total of 210.00 from holding Pro Blend Moderate Term or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Pro Blend Moderate Term
Performance |
| Timeline |
| Calvert Moderate All |
| Pro Blend Moderate |
Calvert Moderate and Pro Blend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Pro Blend
The main advantage of trading using opposite Calvert Moderate and Pro Blend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Pro Blend 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 Pro Blend will offset losses from the drop in Pro Blend's long position.| Calvert Moderate vs. Strategic Allocation Servative | Calvert Moderate vs. Strategic Allocation Aggressive | Calvert Moderate vs. Value Fund Investor | Calvert Moderate vs. International Growth Fund |
| Pro Blend vs. Pro Blend Servative Term | Pro Blend vs. Pro Blend Extended Term | Pro Blend vs. Pro Blend Maximum Term | Pro Blend vs. Greenspring Fund Retail |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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