Correlation Between Calvert Moderate and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Growth 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 Growth 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 Growth Allocation Fund, you can compare the effects of market volatilities on Calvert Moderate and Growth 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Growth Allocation.
Diversification Opportunities for Calvert Moderate and Growth Allocation
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and Growth is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Growth Allocation go up and down completely randomly.
Pair Corralation between Calvert Moderate and Growth Allocation
Assuming the 90 days horizon Calvert Moderate is expected to generate 1.16 times less return on investment than Growth Allocation. But when comparing it to its historical volatility, Calvert Moderate Allocation is 1.12 times less risky than Growth Allocation. It trades about 0.08 of its potential returns per unit of risk. Growth Allocation Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,160 in Growth Allocation Fund on November 5, 2024 and sell it today you would earn a total of 144.00 from holding Growth Allocation Fund or generate 12.41% 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. Growth Allocation Fund
Performance |
| Timeline |
| Calvert Moderate All |
| Growth Allocation |
Calvert Moderate and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Growth Allocation
The main advantage of trading using opposite Calvert Moderate and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Growth 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 Growth Allocation will offset losses from the drop in Growth 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 |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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