Correlation Between Vanguard Total and Calvert Floating-rate
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Calvert Floating-rate 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 Vanguard Total and Calvert Floating-rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Calvert Floating Rate Advantage, you can compare the effects of market volatilities on Vanguard Total and Calvert Floating-rate 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 Vanguard Total with a short position of Calvert Floating-rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Calvert Floating-rate.
Diversification Opportunities for Vanguard Total and Calvert Floating-rate
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Calvert is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Calvert Floating Rate Advantag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Floating Rate and Vanguard Total 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 Vanguard Total International are associated (or correlated) with Calvert Floating-rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Floating Rate has no effect on the direction of Vanguard Total i.e., Vanguard Total and Calvert Floating-rate go up and down completely randomly.
Pair Corralation between Vanguard Total and Calvert Floating-rate
Assuming the 90 days horizon Vanguard Total International is expected to generate 3.87 times more return on investment than Calvert Floating-rate. However, Vanguard Total is 3.87 times more volatile than Calvert Floating Rate Advantage. It trades about 0.06 of its potential returns per unit of risk. Calvert Floating Rate Advantage is currently generating about 0.21 per unit of risk. If you would invest 10,663 in Vanguard Total International on August 28, 2024 and sell it today you would earn a total of 2,464 from holding Vanguard Total International or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Calvert Floating Rate Advantag
Performance |
| Timeline |
| Vanguard Total Inter |
| Calvert Floating Rate |
Vanguard Total and Calvert Floating-rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Calvert Floating-rate
The main advantage of trading using opposite Vanguard Total and Calvert Floating-rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Calvert Floating-rate 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 Floating-rate will offset losses from the drop in Calvert Floating-rate's long position.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index |
| Calvert Floating-rate vs. Georgia Tax Free Bond | Calvert Floating-rate vs. California Bond Fund | Calvert Floating-rate vs. Transamerica Intermediate Muni | Calvert Floating-rate vs. Franklin High Yield |
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 Correlations module to find global opportunities by holding instruments from different markets.
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