Correlation Between Calvert Moderate and Foreign Bond
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Foreign Bond 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 Foreign Bond 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 Foreign Bond Fund, you can compare the effects of market volatilities on Calvert Moderate and Foreign Bond 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 Foreign Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Foreign Bond.
Diversification Opportunities for Calvert Moderate and Foreign Bond
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and Foreign is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Foreign Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Bond 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 Foreign Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Bond has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Foreign Bond go up and down completely randomly.
Pair Corralation between Calvert Moderate and Foreign Bond
Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 1.25 times more return on investment than Foreign Bond. However, Calvert Moderate is 1.25 times more volatile than Foreign Bond Fund. It trades about 0.07 of its potential returns per unit of risk. Foreign Bond Fund is currently generating about 0.03 per unit of risk. If you would invest 1,770 in Calvert Moderate Allocation on September 13, 2024 and sell it today you would earn a total of 366.00 from holding Calvert Moderate Allocation or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Foreign Bond Fund
Performance |
| Timeline |
| Calvert Moderate All |
| Foreign Bond |
Calvert Moderate and Foreign Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Foreign Bond
The main advantage of trading using opposite Calvert Moderate and Foreign Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Foreign Bond 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 Foreign Bond will offset losses from the drop in Foreign Bond's long position.| Calvert Moderate vs. Calvert Developed Market | Calvert Moderate vs. Calvert Developed Market | Calvert Moderate vs. Calvert Short Duration | Calvert Moderate vs. Calvert International Responsible |
| Foreign Bond vs. Alpine Ultra Short | Foreign Bond vs. Prudential Short Duration | Foreign Bond vs. Siit Ultra Short | Foreign Bond vs. Blackrock Short Term Inflat Protected |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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