Correlation Between Growth Strategy and Calvert Moderate
Can any of the company-specific risk be diversified away by investing in both Growth Strategy 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 Growth Strategy and Calvert Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Calvert Moderate Allocation, you can compare the effects of market volatilities on Growth Strategy 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 Growth Strategy with a short position of Calvert Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Calvert Moderate.
Diversification Opportunities for Growth Strategy and Calvert Moderate
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GROWTH and Calvert is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund 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 Growth Strategy 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 Growth Strategy Fund 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 Growth Strategy i.e., Growth Strategy and Calvert Moderate go up and down completely randomly.
Pair Corralation between Growth Strategy and Calvert Moderate
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 1.05 times more return on investment than Calvert Moderate. However, Growth Strategy is 1.05 times more volatile than Calvert Moderate Allocation. It trades about 0.15 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.11 per unit of risk. If you would invest 1,039 in Growth Strategy Fund on September 1, 2024 and sell it today you would earn a total of 277.00 from holding Growth Strategy Fund or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Growth Strategy Fund vs. Calvert Moderate Allocation
Performance |
| Timeline |
| Growth Strategy |
| Calvert Moderate All |
Growth Strategy and Calvert Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Calvert Moderate
The main advantage of trading using opposite Growth Strategy and Calvert Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy 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.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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