Correlation Between American Funds and Calvert Moderate
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Calvert Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Retirement and Calvert Moderate Allocation, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Calvert Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Moderate.
Diversification Opportunities for American Funds and Calvert Moderate
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Calvert is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Retirement 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 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 Retirement 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 American Funds i.e., American Funds and Calvert Moderate go up and down completely randomly.
Pair Corralation between American Funds and Calvert Moderate
Assuming the 90 days horizon American Funds Retirement is expected to generate 0.73 times more return on investment than Calvert Moderate. However, American Funds Retirement is 1.37 times less risky than Calvert Moderate. It trades about 0.1 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.06 per unit of risk. If you would invest 1,098 in American Funds Retirement on August 28, 2024 and sell it today you would earn a total of 174.00 from holding American Funds Retirement or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Retirement vs. Calvert Moderate Allocation
Performance |
| Timeline |
| American Funds Retirement |
| Calvert Moderate All |
American Funds and Calvert Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert Moderate
The main advantage of trading using opposite American Funds and Calvert Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Blackrock Sm Cap | American Funds vs. Ips Strategic Capital | American Funds vs. Rbb Fund | American Funds vs. Archer Balanced Fund |
| Calvert Moderate vs. Fisher Small Cap | Calvert Moderate vs. Qs Small Capitalization | Calvert Moderate vs. Ancorathelen Small Mid Cap | Calvert Moderate vs. Tax Managed Mid Small |
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.
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