Correlation Between Calvert Bond and New Perspective
Can any of the company-specific risk be diversified away by investing in both Calvert Bond and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Calvert Bond and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Bond and New Perspective.
Diversification Opportunities for Calvert Bond and New Perspective
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Calvert and New is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Bond Portfolio and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Calvert Bond i.e., Calvert Bond and New Perspective go up and down completely randomly.
Pair Corralation between Calvert Bond and New Perspective
Assuming the 90 days horizon Calvert Bond Portfolio is expected to generate 0.23 times more return on investment than New Perspective. However, Calvert Bond Portfolio is 4.33 times less risky than New Perspective. It trades about 0.2 of its potential returns per unit of risk. New Perspective Fund is currently generating about -0.24 per unit of risk. If you would invest 1,423 in Calvert Bond Portfolio on December 15, 2024 and sell it today you would earn a total of 17.00 from holding Calvert Bond Portfolio or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Bond Portfolio vs. New Perspective Fund
Performance |
| Timeline |
| Calvert Bond Portfolio |
| New Perspective |
Calvert Bond and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Bond and New Perspective
The main advantage of trading using opposite Calvert Bond and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Bond position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Calvert Bond vs. Rbc Emerging Markets | ||
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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