Correlation Between Floating Rate and Calvert Floating-rate
Can any of the company-specific risk be diversified away by investing in both Floating Rate and Calvert Floating-rate 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 Floating Rate and Calvert Floating-rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Calvert Floating Rate Advantage, you can compare the effects of market volatilities on Floating Rate and Calvert Floating-rate 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 Floating Rate with a short position of Calvert Floating-rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Calvert Floating-rate.
Diversification Opportunities for Floating Rate and Calvert Floating-rate
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Floating and Calvert is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund and Calvert Floating Rate Advantag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Floating Rate and Floating Rate 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 Floating Rate Fund are associated (or correlated) with Calvert Floating-rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Floating Rate has no effect on the direction of Floating Rate i.e., Floating Rate and Calvert Floating-rate go up and down completely randomly.
Pair Corralation between Floating Rate and Calvert Floating-rate
Assuming the 90 days horizon Floating Rate is expected to generate 1.46 times less return on investment than Calvert Floating-rate. But when comparing it to its historical volatility, Floating Rate Fund is 1.25 times less risky than Calvert Floating-rate. It trades about 0.23 of its potential returns per unit of risk. Calvert Floating Rate Advantage is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Calvert Floating Rate Advantage on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Calvert Floating Rate Advantage or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Calvert Floating Rate Advantag
Performance |
| Timeline |
| Floating Rate |
| Calvert Floating Rate |
Floating Rate and Calvert Floating-rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Calvert Floating-rate
The main advantage of trading using opposite Floating Rate and Calvert Floating-rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate position performs unexpectedly, Calvert Floating-rate 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 Floating-rate will offset losses from the drop in Calvert Floating-rate's long position.| Floating Rate vs. Lord Abbett Trust | Floating Rate vs. Lord Abbett Trust | Floating Rate vs. Lord Abbett Focused | Floating Rate vs. Floating Rate Fund |
| Calvert Floating-rate vs. Georgia Tax Free Bond | Calvert Floating-rate vs. California Bond Fund | Calvert Floating-rate vs. Transamerica Intermediate Muni | Calvert Floating-rate vs. Franklin High Yield |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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