Correlation Between American Funds and Calvert Aggressive
Can any of the company-specific risk be diversified away by investing in both American Funds and Calvert Aggressive 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 American Funds and Calvert Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2040 and Calvert Aggressive Allocation, you can compare the effects of market volatilities on American Funds and Calvert Aggressive 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 American Funds with a short position of Calvert Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Aggressive.
Diversification Opportunities for American Funds and Calvert Aggressive
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Calvert is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2040 and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and American Funds 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 American Funds 2040 are associated (or correlated) with Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of American Funds i.e., American Funds and Calvert Aggressive go up and down completely randomly.
Pair Corralation between American Funds and Calvert Aggressive
Assuming the 90 days horizon American Funds 2040 is expected to generate 0.92 times more return on investment than Calvert Aggressive. However, American Funds 2040 is 1.08 times less risky than Calvert Aggressive. It trades about 0.14 of its potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.11 per unit of risk. If you would invest 1,764 in American Funds 2040 on September 15, 2024 and sell it today you would earn a total of 438.00 from holding American Funds 2040 or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
American Funds 2040 vs. Calvert Aggressive Allocation
Performance |
| Timeline |
| American Funds 2040 |
| Calvert Aggressive |
American Funds and Calvert Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert Aggressive
The main advantage of trading using opposite American Funds and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Calvert Aggressive 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 Aggressive will offset losses from the drop in Calvert Aggressive's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Short Duration | Calvert Aggressive vs. Calvert International Responsible |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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