Correlation Between Calvert High and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Calvert High and Multimanager Lifestyle 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 Multimanager Lifestyle 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 Multimanager Lifestyle Aggressive, you can compare the effects of market volatilities on Calvert High and Multimanager Lifestyle 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 Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert High and Multimanager Lifestyle.
Diversification Opportunities for Calvert High and Multimanager Lifestyle
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and MULTIMANAGER is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Calvert High Yield and Multimanager Lifestyle Aggress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle 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 Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Calvert High i.e., Calvert High and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Calvert High and Multimanager Lifestyle
Assuming the 90 days horizon Calvert High is expected to generate 2.03 times less return on investment than Multimanager Lifestyle. But when comparing it to its historical volatility, Calvert High Yield is 5.09 times less risky than Multimanager Lifestyle. It trades about 0.22 of its potential returns per unit of risk. Multimanager Lifestyle Aggressive is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,432 in Multimanager Lifestyle Aggressive on September 3, 2024 and sell it today you would earn a total of 125.00 from holding Multimanager Lifestyle Aggressive or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert High Yield vs. Multimanager Lifestyle Aggress
Performance |
| Timeline |
| Calvert High Yield |
| Multimanager Lifestyle |
Calvert High and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert High and Multimanager Lifestyle
The main advantage of trading using opposite Calvert High and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert High position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| Calvert High vs. Vanguard High Yield Corporate | Calvert High vs. Vanguard High Yield Porate | Calvert High vs. Blackrock Hi Yld | Calvert High vs. Blackrock High Yield |
| Multimanager Lifestyle vs. American Funds Growth | Multimanager Lifestyle vs. American Funds Growth | Multimanager Lifestyle vs. Franklin Mutual Shares | Multimanager Lifestyle vs. Franklin Mutual Shares |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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