Correlation Between Calvert Moderate and Guggenheim Floating
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Guggenheim Floating 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 Guggenheim Floating 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 Guggenheim Floating Rate, you can compare the effects of market volatilities on Calvert Moderate and Guggenheim Floating 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 Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Guggenheim Floating.
Diversification Opportunities for Calvert Moderate and Guggenheim Floating
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Calvert and Guggenheim is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Guggenheim Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Floating Rate 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 Guggenheim Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Floating Rate has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Guggenheim Floating go up and down completely randomly.
Pair Corralation between Calvert Moderate and Guggenheim Floating
Assuming the 90 days horizon Calvert Moderate is expected to generate 1.02 times less return on investment than Guggenheim Floating. In addition to that, Calvert Moderate is 3.25 times more volatile than Guggenheim Floating Rate. It trades about 0.06 of its total potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.21 per unit of volatility. If you would invest 2,113 in Guggenheim Floating Rate on August 31, 2024 and sell it today you would earn a total of 314.00 from holding Guggenheim Floating Rate or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Guggenheim Floating Rate
Performance |
| Timeline |
| Calvert Moderate All |
| Guggenheim Floating Rate |
Calvert Moderate and Guggenheim Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Guggenheim Floating
The main advantage of trading using opposite Calvert Moderate and Guggenheim Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Guggenheim Floating 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 Guggenheim Floating will offset losses from the drop in Guggenheim Floating's long position.| Calvert Moderate vs. American Funds American | Calvert Moderate vs. American Funds American | Calvert Moderate vs. American Balanced | Calvert Moderate vs. American Balanced Fund |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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