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 International, 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
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calvert and American is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio and American Beacon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Inte 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 Inte 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 Portfolio is expected to under-perform the American Beacon. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Balanced Portfolio is 1.51 times less risky than American Beacon. The mutual fund trades about -0.17 of its potential returns per unit of risk. The American Beacon International is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,632 in American Beacon International on January 1, 2025 and sell it today you would lose (14.00) from holding American Beacon International or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Calvert Balanced Portfolio vs. American Beacon International
Performance |
| Timeline |
| Calvert Balanced Por |
| American Beacon Inte |
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. 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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