Correlation Between Metropolitan West and Calvert Bond
Can any of the company-specific risk be diversified away by investing in both Metropolitan West and Calvert Bond 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 Metropolitan West and Calvert Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West High and Calvert Bond Portfolio, you can compare the effects of market volatilities on Metropolitan West and Calvert Bond 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 Metropolitan West with a short position of Calvert Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Calvert Bond.
Diversification Opportunities for Metropolitan West and Calvert Bond
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metropolitan and Calvert is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West High and Calvert Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Bond Portfolio and Metropolitan West 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 Metropolitan West High are associated (or correlated) with Calvert Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Bond Portfolio has no effect on the direction of Metropolitan West i.e., Metropolitan West and Calvert Bond go up and down completely randomly.
Pair Corralation between Metropolitan West and Calvert Bond
Assuming the 90 days horizon Metropolitan West is expected to generate 2.29 times less return on investment than Calvert Bond. But when comparing it to its historical volatility, Metropolitan West High is 3.05 times less risky than Calvert Bond. It trades about 0.14 of its potential returns per unit of risk. Calvert Bond Portfolio is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Calvert Bond Portfolio on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Calvert Bond Portfolio or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Metropolitan West High vs. Calvert Bond Portfolio
Performance |
| Timeline |
| Metropolitan West High |
| Calvert Bond Portfolio |
Metropolitan West and Calvert Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Calvert Bond
The main advantage of trading using opposite Metropolitan West and Calvert Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West position performs unexpectedly, Calvert Bond 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 Bond will offset losses from the drop in Calvert Bond's long position.| Metropolitan West vs. Federated Total Return | Metropolitan West vs. Global Bond Fund | Metropolitan West vs. Government Bond Fund | Metropolitan West vs. Aberdeen Global High |
| Calvert Bond vs. Lgm Risk Managed | Calvert Bond vs. Metropolitan West High | Calvert Bond vs. Ab High Income | Calvert Bond vs. Aqr Risk Balanced Modities |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |