Correlation Between Calvert Moderate and Fairholme Fund
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Fairholme Fund 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 Fairholme Fund 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 The Fairholme Fund, you can compare the effects of market volatilities on Calvert Moderate and Fairholme Fund 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 Fairholme Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Fairholme Fund.
Diversification Opportunities for Calvert Moderate and Fairholme Fund
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Fairholme is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and The Fairholme Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairholme Fund 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 Fairholme Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairholme Fund has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Fairholme Fund go up and down completely randomly.
Pair Corralation between Calvert Moderate and Fairholme Fund
Assuming the 90 days horizon Calvert Moderate is expected to generate 2.22 times less return on investment than Fairholme Fund. But when comparing it to its historical volatility, Calvert Moderate Allocation is 2.56 times less risky than Fairholme Fund. It trades about 0.24 of its potential returns per unit of risk. The Fairholme Fund is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,974 in The Fairholme Fund on November 4, 2024 and sell it today you would earn a total of 164.00 from holding The Fairholme Fund or generate 5.51% 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. The Fairholme Fund
Performance |
| Timeline |
| Calvert Moderate All |
| Fairholme Fund |
Calvert Moderate and Fairholme Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Fairholme Fund
The main advantage of trading using opposite Calvert Moderate and Fairholme Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Fairholme Fund 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 Fairholme Fund will offset losses from the drop in Fairholme Fund'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 |
| Fairholme Fund vs. Small Cap Equity | Fairholme Fund vs. Qs Global Equity | Fairholme Fund vs. Enhanced Fixed Income | Fairholme Fund vs. Calvert International Equity |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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