Correlation Between Calvert Bond and Nationwide Government
Can any of the company-specific risk be diversified away by investing in both Calvert Bond and Nationwide Government 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 Bond and Nationwide Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Bond Portfolio and Nationwide Government Bond, you can compare the effects of market volatilities on Calvert Bond and Nationwide Government 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 Bond with a short position of Nationwide Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Bond and Nationwide Government.
Diversification Opportunities for Calvert Bond and Nationwide Government
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and NATIONWIDE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Bond Portfolio and Nationwide Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Government and Calvert Bond 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 Bond Portfolio are associated (or correlated) with Nationwide Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Government has no effect on the direction of Calvert Bond i.e., Calvert Bond and Nationwide Government go up and down completely randomly.
Pair Corralation between Calvert Bond and Nationwide Government
Assuming the 90 days horizon Calvert Bond Portfolio is expected to generate 9.26 times more return on investment than Nationwide Government. However, Calvert Bond is 9.26 times more volatile than Nationwide Government Bond. It trades about 0.15 of its potential returns per unit of risk. Nationwide Government Bond is currently generating about 0.4 per unit of risk. If you would invest 1,427 in Calvert Bond Portfolio on December 13, 2024 and sell it today you would earn a total of 14.00 from holding Calvert Bond Portfolio or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Bond Portfolio vs. Nationwide Government Bond
Performance |
| Timeline |
| Calvert Bond Portfolio |
| Nationwide Government |
Calvert Bond and Nationwide Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Bond and Nationwide Government
The main advantage of trading using opposite Calvert Bond and Nationwide Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Bond position performs unexpectedly, Nationwide Government 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 Nationwide Government will offset losses from the drop in Nationwide Government's long position.| Calvert Bond vs. Franklin Gold Precious | ||
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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