Correlation Between Health Care and Calvert High
Can any of the company-specific risk be diversified away by investing in both Health Care 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 Health Care and Calvert High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Fund and Calvert High Yield, you can compare the effects of market volatilities on Health Care 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 Health Care with a short position of Calvert High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and Calvert High.
Diversification Opportunities for Health Care and Calvert High
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between HEALTH and Calvert is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Health Care 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 Health Care 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 Health Care 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 Health Care i.e., Health Care and Calvert High go up and down completely randomly.
Pair Corralation between Health Care and Calvert High
Assuming the 90 days horizon Health Care is expected to generate 1.22 times less return on investment than Calvert High. In addition to that, Health Care is 3.12 times more volatile than Calvert High Yield. It trades about 0.03 of its total potential returns per unit of risk. Calvert High Yield is currently generating about 0.12 per unit of volatility. If you would invest 2,163 in Calvert High Yield on October 30, 2024 and sell it today you would earn a total of 328.00 from holding Calvert High Yield or generate 15.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Fund vs. Calvert High Yield
Performance |
| Timeline |
| Health Care Fund |
| Calvert High Yield |
Health Care and Calvert High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and Calvert High
The main advantage of trading using opposite Health Care and Calvert High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care 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.| Health Care vs. Hennessy Technology Fund | Health Care vs. Dreyfus Technology Growth | Health Care vs. Icon Information Technology | Health Care vs. Technology Ultrasector Profund |
| Calvert High vs. Calvert Developed Market | Calvert High vs. Calvert Developed Market | Calvert High vs. Calvert Short Duration | Calvert High 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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