Correlation Between Calvert Balanced and American Balanced
Can any of the company-specific risk be diversified away by investing in both Calvert Balanced and American Balanced 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 Balanced and American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Balanced Portfolio and American Balanced Fund, you can compare the effects of market volatilities on Calvert Balanced and American Balanced 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 Balanced with a short position of American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Balanced and American Balanced.
Diversification Opportunities for Calvert Balanced and American Balanced
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and American is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced and Calvert Balanced 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 Balanced Portfolio are associated (or correlated) with American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Calvert Balanced i.e., Calvert Balanced and American Balanced go up and down completely randomly.
Pair Corralation between Calvert Balanced and American Balanced
Assuming the 90 days horizon Calvert Balanced Portfolio is expected to generate 1.04 times more return on investment than American Balanced. However, Calvert Balanced is 1.04 times more volatile than American Balanced Fund. It trades about 0.11 of its potential returns per unit of risk. American Balanced Fund is currently generating about 0.1 per unit of risk. If you would invest 3,363 in Calvert Balanced Portfolio on August 29, 2024 and sell it today you would earn a total of 1,127 from holding Calvert Balanced Portfolio or generate 33.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Balanced Portfolio vs. American Balanced Fund
Performance |
| Timeline |
| Calvert Balanced Por |
| American Balanced |
Calvert Balanced and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Balanced and American Balanced
The main advantage of trading using opposite Calvert Balanced and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Balanced position performs unexpectedly, American Balanced 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 Balanced will offset losses from the drop in American Balanced's long position.| Calvert Balanced vs. American Balanced Fund | Calvert Balanced vs. American Balanced Fund | Calvert Balanced vs. HUMANA INC | Calvert Balanced vs. Aquagold International |
| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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