Correlation Between Ab Government and Calvert Smallmid

Can any of the company-specific risk be diversified away by investing in both Ab Government and Calvert Smallmid 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 Ab Government and Calvert Smallmid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Government Exchange and Calvert Smallmid Cap A, you can compare the effects of market volatilities on Ab Government and Calvert Smallmid 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 Ab Government with a short position of Calvert Smallmid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Government and Calvert Smallmid.

Diversification Opportunities for Ab Government and Calvert Smallmid

0.0

Correlation Coefficient

Ab Government  Calvert Smallmid

Pay attention - limited upside

The 3 months correlation between AEYXX and Calvert is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ab Government Exchange and Calvert Smallmid Cap A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Smallmid Cap and Ab Government 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 Ab Government Exchange are associated (or correlated) with Calvert Smallmid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Smallmid Cap has no effect on the direction of Ab Government i.e., Ab Government and Calvert Smallmid go up and down completely randomly.

Pair Corralation between Ab Government and Calvert Smallmid

Assuming the 90 days horizon Ab Government Exchange is expected to generate 57.94 times more return on investment than Calvert Smallmid. However, Ab Government is 57.94 times more volatile than Calvert Smallmid Cap A. It trades about 0.11 of its potential returns per unit of risk. Calvert Smallmid Cap A is currently generating about 0.04 per unit of risk. If you would invest  408.00  in Ab Government Exchange on October 4, 2024 and sell it today you would lose (308.00) from holding Ab Government Exchange or give up 75.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.92%
Values	Daily Returns

Ab Government Exchange  vs.  Calvert Smallmid Cap A

Ab Government Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Government Exchange has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Smallmid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Smallmid Cap A has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Calvert Smallmid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Government and Calvert Smallmid

The main advantage of trading using opposite Ab Government and Calvert Smallmid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Government position performs unexpectedly, Calvert Smallmid 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 Smallmid will offset losses from the drop in Calvert Smallmid's long position.

The idea behind Ab Government Exchange and Calvert Smallmid Cap A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.