Correlation Between Calvert Moderate and American Funds
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and American Funds 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 American Funds 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 American Funds Retirement, you can compare the effects of market volatilities on Calvert Moderate and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and American Funds.
Diversification Opportunities for Calvert Moderate and American Funds
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and American is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and American Funds Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Retirement 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Retirement has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and American Funds go up and down completely randomly.
Pair Corralation between Calvert Moderate and American Funds
Assuming the 90 days horizon Calvert Moderate is expected to generate 1.27 times less return on investment than American Funds. In addition to that, Calvert Moderate is 1.37 times more volatile than American Funds Retirement. It trades about 0.06 of its total potential returns per unit of risk. American Funds Retirement is currently generating about 0.1 per unit of volatility. If you would invest 1,098 in American Funds Retirement on August 28, 2024 and sell it today you would earn a total of 174.00 from holding American Funds Retirement or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. American Funds Retirement
Performance |
| Timeline |
| Calvert Moderate All |
| American Funds Retirement |
Calvert Moderate and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and American Funds
The main advantage of trading using opposite Calvert Moderate and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Calvert Moderate vs. Fisher Small Cap | Calvert Moderate vs. Qs Small Capitalization | Calvert Moderate vs. Ancorathelen Small Mid Cap | Calvert Moderate vs. Tax Managed Mid Small |
| American Funds vs. Blackrock Sm Cap | American Funds vs. Ips Strategic Capital | American Funds vs. Rbb Fund | American Funds vs. Archer 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |