Correlation Between American Funds and Calvert High
Can any of the company-specific risk be diversified away by investing in both American Funds and Calvert High 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 American Funds and Calvert High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2050 and Calvert High Yield, you can compare the effects of market volatilities on American Funds and Calvert High 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 American Funds with a short position of Calvert High. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert High.
Diversification Opportunities for American Funds and Calvert High
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Calvert is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and Calvert High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert High Yield and American Funds 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 American Funds 2050 are associated (or correlated) with Calvert High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert High Yield has no effect on the direction of American Funds i.e., American Funds and Calvert High go up and down completely randomly.
Pair Corralation between American Funds and Calvert High
Assuming the 90 days horizon American Funds 2050 is expected to generate 2.78 times more return on investment than Calvert High. However, American Funds is 2.78 times more volatile than Calvert High Yield. It trades about 0.11 of its potential returns per unit of risk. Calvert High Yield is currently generating about 0.13 per unit of risk. If you would invest 1,539 in American Funds 2050 on September 12, 2024 and sell it today you would earn a total of 668.00 from holding American Funds 2050 or generate 43.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Funds 2050 vs. Calvert High Yield
Performance |
| Timeline |
| American Funds 2050 |
| Calvert High Yield |
American Funds and Calvert High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert High
The main advantage of trading using opposite American Funds and Calvert High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Calvert High 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 Calvert High will offset losses from the drop in Calvert High's long position.| American Funds vs. Artisan Emerging Markets | American Funds vs. Siit Emerging Markets | American Funds vs. Angel Oak Multi Strategy | American Funds vs. Eagle Mlp Strategy |
| Calvert High vs. Locorr Dynamic Equity | Calvert High vs. Balanced Fund Retail | Calvert High vs. Us Strategic Equity | Calvert High vs. Gmo Global Equity |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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