Correlation Between Calvert Balanced and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Calvert Balanced and Strategic Allocation 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 Strategic Allocation 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 Strategic Allocation Servative, you can compare the effects of market volatilities on Calvert Balanced and Strategic Allocation 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 Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Balanced and Strategic Allocation.
Diversification Opportunities for Calvert Balanced and Strategic Allocation
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and Strategic is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio and Strategic Allocation Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation 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 Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Calvert Balanced i.e., Calvert Balanced and Strategic Allocation go up and down completely randomly.
Pair Corralation between Calvert Balanced and Strategic Allocation
Assuming the 90 days horizon Calvert Balanced Portfolio is expected to generate 1.36 times more return on investment than Strategic Allocation. However, Calvert Balanced is 1.36 times more volatile than Strategic Allocation Servative. It trades about 0.15 of its potential returns per unit of risk. Strategic Allocation Servative is currently generating about 0.13 per unit of risk. If you would invest 3,608 in Calvert Balanced Portfolio on September 12, 2024 and sell it today you would earn a total of 1,095 from holding Calvert Balanced Portfolio or generate 30.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Balanced Portfolio vs. Strategic Allocation Servative
Performance |
| Timeline |
| Calvert Balanced Por |
| Strategic Allocation |
Calvert Balanced and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Balanced and Strategic Allocation
The main advantage of trading using opposite Calvert Balanced and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Balanced position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Calvert Balanced vs. Strategic Allocation Servative | Calvert Balanced vs. Strategic Allocation Aggressive | Calvert Balanced vs. Value Fund Investor | Calvert Balanced vs. International Growth Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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