Correlation Between Calvert Balanced and American Beacon
Can any of the company-specific risk be diversified away by investing in both Calvert Balanced and American Beacon 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 Beacon 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 Beacon Balanced, you can compare the effects of market volatilities on Calvert Balanced and American Beacon 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 Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Balanced and American Beacon.
Diversification Opportunities for Calvert Balanced and American Beacon
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CALVERT and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio and American Beacon Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon 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 Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Balanced has no effect on the direction of Calvert Balanced i.e., Calvert Balanced and American Beacon go up and down completely randomly.
Pair Corralation between Calvert Balanced and American Beacon
Assuming the 90 days horizon Calvert Balanced is expected to generate 1.19 times less return on investment than American Beacon. In addition to that, Calvert Balanced is 1.17 times more volatile than American Beacon Balanced. It trades about 0.16 of its total potential returns per unit of risk. American Beacon Balanced is currently generating about 0.23 per unit of volatility. If you would invest 1,292 in American Beacon Balanced on August 29, 2024 and sell it today you would earn a total of 35.00 from holding American Beacon Balanced or generate 2.71% 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 Beacon Balanced
Performance |
| Timeline |
| Calvert Balanced Por |
| American Beacon Balanced |
Calvert Balanced and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Balanced and American Beacon
The main advantage of trading using opposite Calvert Balanced and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Balanced position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon'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 Beacon vs. American Beacon International | American Beacon vs. American Beacon Large | American Beacon vs. Calvert Balanced Portfolio | American Beacon vs. Buffalo Flexible Income |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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