Correlation Between Calvert High and Capital World
Can any of the company-specific risk be diversified away by investing in both Calvert High and Capital World 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 High and Capital World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert High Yield and Capital World Bond, you can compare the effects of market volatilities on Calvert High and Capital World 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 High with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert High and Capital World.
Diversification Opportunities for Calvert High and Capital World
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calvert and Capital is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Calvert High Yield and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond and Calvert High 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 High Yield are associated (or correlated) with Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Calvert High i.e., Calvert High and Capital World go up and down completely randomly.
Pair Corralation between Calvert High and Capital World
Assuming the 90 days horizon Calvert High Yield is expected to generate 0.5 times more return on investment than Capital World. However, Calvert High Yield is 1.98 times less risky than Capital World. It trades about 0.2 of its potential returns per unit of risk. Capital World Bond is currently generating about 0.04 per unit of risk. If you would invest 2,273 in Calvert High Yield on September 4, 2024 and sell it today you would earn a total of 224.00 from holding Calvert High Yield or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert High Yield vs. Capital World Bond
Performance |
| Timeline |
| Calvert High Yield |
| Capital World Bond |
Calvert High and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert High and Capital World
The main advantage of trading using opposite Calvert High and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert High position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Calvert High vs. Adams Diversified Equity | Calvert High vs. Sentinel Small Pany | Calvert High vs. Legg Mason Bw | Calvert High vs. T Rowe Price |
| Capital World vs. Income Fund Of | Capital World vs. New World Fund | Capital World vs. American Mutual Fund | Capital World vs. American Mutual 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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