Correlation Between Calvert Moderate and Balanced Allocation
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Balanced Allocation 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 Balanced Allocation 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 Balanced Allocation Fund, you can compare the effects of market volatilities on Calvert Moderate and Balanced Allocation 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 Balanced Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Balanced Allocation.
Diversification Opportunities for Calvert Moderate and Balanced Allocation
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and Balanced is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Balanced Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Allocation 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 Balanced Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Allocation has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Balanced Allocation go up and down completely randomly.
Pair Corralation between Calvert Moderate and Balanced Allocation
Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 1.25 times more return on investment than Balanced Allocation. However, Calvert Moderate is 1.25 times more volatile than Balanced Allocation Fund. It trades about 0.08 of its potential returns per unit of risk. Balanced Allocation Fund is currently generating about 0.09 per unit of risk. If you would invest 1,890 in Calvert Moderate Allocation on November 5, 2024 and sell it today you would earn a total of 201.00 from holding Calvert Moderate Allocation or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Balanced Allocation Fund
Performance |
| Timeline |
| Calvert Moderate All |
| Balanced Allocation |
Calvert Moderate and Balanced Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Balanced Allocation
The main advantage of trading using opposite Calvert Moderate and Balanced Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Balanced Allocation 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 Balanced Allocation will offset losses from the drop in Balanced Allocation's long position.| Calvert Moderate vs. Prudential Government Money | Calvert Moderate vs. Virtus Seix Government | Calvert Moderate vs. Great West Government Mortgage | Calvert Moderate vs. Franklin Adjustable Government |
| Balanced Allocation vs. Mesirow Financial Small | Balanced Allocation vs. John Hancock Financial | Balanced Allocation vs. 1919 Financial Services | Balanced Allocation vs. Blackrock Financial Institutions |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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