Correlation Between Calvert Moderate and Federated High
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Federated High 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 Federated High 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 Federated High Yield, you can compare the effects of market volatilities on Calvert Moderate and Federated High 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 Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Federated High.
Diversification Opportunities for Calvert Moderate and Federated High
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Federated is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield 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 Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Federated High go up and down completely randomly.
Pair Corralation between Calvert Moderate and Federated High
Assuming the 90 days horizon Calvert Moderate Allocation is expected to under-perform the Federated High. In addition to that, Calvert Moderate is 3.79 times more volatile than Federated High Yield. It trades about -0.29 of its total potential returns per unit of risk. Federated High Yield is currently generating about -0.34 per unit of volatility. If you would invest 644.00 in Federated High Yield on October 11, 2024 and sell it today you would lose (9.00) from holding Federated High Yield or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Federated High Yield
Performance |
| Timeline |
| Calvert Moderate All |
| Federated High Yield |
Calvert Moderate and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Federated High
The main advantage of trading using opposite Calvert Moderate and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| Calvert Moderate vs. Cref Money Market | Calvert Moderate vs. Edward Jones Money | Calvert Moderate vs. General Money Market | Calvert Moderate vs. Dws Government Money |
| Federated High vs. Qs Moderate Growth | Federated High vs. Voya Target Retirement | Federated High vs. Calvert Moderate Allocation | Federated High vs. Qs Moderate Growth |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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