Correlation Between Calvert Moderate and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Invesco Municipal 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 Invesco Municipal 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 Invesco Municipal Income, you can compare the effects of market volatilities on Calvert Moderate and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Invesco Municipal.
Diversification Opportunities for Calvert Moderate and Invesco Municipal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Invesco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Invesco Municipal go up and down completely randomly.
Pair Corralation between Calvert Moderate and Invesco Municipal
Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 2.04 times more return on investment than Invesco Municipal. However, Calvert Moderate is 2.04 times more volatile than Invesco Municipal Income. It trades about -0.12 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about -0.28 per unit of risk. If you would invest 2,122 in Calvert Moderate Allocation on September 27, 2024 and sell it today you would lose (29.00) from holding Calvert Moderate Allocation or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Invesco Municipal Income
Performance |
| Timeline |
| Calvert Moderate All |
| Invesco Municipal Income |
Calvert Moderate and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Invesco Municipal
The main advantage of trading using opposite Calvert Moderate and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Calvert Moderate vs. Qs Moderate Growth | Calvert Moderate vs. Mid Cap Growth | Calvert Moderate vs. Eip Growth And | Calvert Moderate vs. Praxis Growth Index |
| Invesco Municipal vs. Oppenheimer Rising Dividends | Invesco Municipal vs. Invesco High Yield | Invesco Municipal vs. Oppenheimer Strategic Income | Invesco Municipal vs. Oppenheimer International Small |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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