Correlation Between College Retirement and Calvert Moderate
Can any of the company-specific risk be diversified away by investing in both College Retirement and Calvert Moderate 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 College Retirement and Calvert Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Calvert Moderate Allocation, you can compare the effects of market volatilities on College Retirement and Calvert Moderate 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 College Retirement with a short position of Calvert Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Calvert Moderate.
Diversification Opportunities for College Retirement and Calvert Moderate
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between College and Calvert is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Calvert Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Moderate All and College Retirement 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 College Retirement Equities are associated (or correlated) with Calvert Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Moderate All has no effect on the direction of College Retirement i.e., College Retirement and Calvert Moderate go up and down completely randomly.
Pair Corralation between College Retirement and Calvert Moderate
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 1.38 times more return on investment than Calvert Moderate. However, College Retirement is 1.38 times more volatile than Calvert Moderate Allocation. It trades about 0.13 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.08 per unit of risk. If you would invest 37,405 in College Retirement Equities on September 12, 2024 and sell it today you would earn a total of 14,565 from holding College Retirement Equities or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. Calvert Moderate Allocation
Performance |
| Timeline |
| College Retirement |
| Calvert Moderate All |
College Retirement and Calvert Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Calvert Moderate
The main advantage of trading using opposite College Retirement and Calvert Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Calvert Moderate 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 Moderate will offset losses from the drop in Calvert Moderate's long position.| College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard 500 Index | College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard Total Stock |
| Calvert Moderate vs. Strategic Allocation Servative | Calvert Moderate vs. Strategic Allocation Aggressive | Calvert Moderate vs. Value Fund Investor | Calvert Moderate vs. International Growth Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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