Correlation Between American Funds and Calvert Balanced
Can any of the company-specific risk be diversified away by investing in both American Funds and Calvert Balanced 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 Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Calvert Balanced Portfolio, you can compare the effects of market volatilities on American Funds and Calvert Balanced 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 Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Balanced.
Diversification Opportunities for American Funds and Calvert Balanced
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Calvert is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Calvert Balanced Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Balanced Por 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 American are associated (or correlated) with Calvert Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Balanced Por has no effect on the direction of American Funds i.e., American Funds and Calvert Balanced go up and down completely randomly.
Pair Corralation between American Funds and Calvert Balanced
Assuming the 90 days horizon American Funds is expected to generate 1.15 times less return on investment than Calvert Balanced. But when comparing it to its historical volatility, American Funds American is 1.04 times less risky than Calvert Balanced. It trades about 0.1 of its potential returns per unit of risk. Calvert Balanced Portfolio is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,459 in Calvert Balanced Portfolio on August 25, 2024 and sell it today you would earn a total of 1,191 from holding Calvert Balanced Portfolio or generate 34.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Funds American vs. Calvert Balanced Portfolio
Performance |
| Timeline |
| American Funds American |
| Calvert Balanced Por |
American Funds and Calvert Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert Balanced
The main advantage of trading using opposite American Funds and Calvert Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Calvert Balanced 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 Balanced will offset losses from the drop in Calvert Balanced's long position.| American Funds vs. Income Fund Of | American Funds vs. Capital Income Builder | American Funds vs. Capital World Growth | American Funds vs. Growth Fund Of |
| Calvert Balanced vs. Dreyfus Institutional Reserves | Calvert Balanced vs. Chestnut Street Exchange | Calvert Balanced vs. Pioneer Money Market | Calvert Balanced vs. Legg Mason Partners |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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