Correlation Between Moderate Duration and Calvert High
Can any of the company-specific risk be diversified away by investing in both Moderate Duration 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 Moderate Duration and Calvert High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Duration Fund and Calvert High Yield, you can compare the effects of market volatilities on Moderate Duration 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 Moderate Duration with a short position of Calvert High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Duration and Calvert High.
Diversification Opportunities for Moderate Duration and Calvert High
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Moderate and Calvert is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Duration Fund 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 Moderate Duration 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 Moderate Duration Fund 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 Moderate Duration i.e., Moderate Duration and Calvert High go up and down completely randomly.
Pair Corralation between Moderate Duration and Calvert High
Assuming the 90 days horizon Moderate Duration Fund is expected to generate 1.4 times more return on investment than Calvert High. However, Moderate Duration is 1.4 times more volatile than Calvert High Yield. It trades about 0.15 of its potential returns per unit of risk. Calvert High Yield is currently generating about 0.1 per unit of risk. If you would invest 921.00 in Moderate Duration Fund on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Moderate Duration Fund or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Moderate Duration Fund vs. Calvert High Yield
Performance |
| Timeline |
| Moderate Duration |
| Calvert High Yield |
Moderate Duration and Calvert High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Duration and Calvert High
The main advantage of trading using opposite Moderate Duration and Calvert High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Duration 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.| Moderate Duration vs. Multimedia Portfolio Multimedia | Moderate Duration vs. Small Cap Stock | Moderate Duration vs. Commonwealth Global Fund | Moderate Duration vs. Ab Value Fund |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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