Correlation Between One Choice and Calvert Aggressive

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

By analyzing existing cross correlation between One Choice Portfolio and Calvert Aggressive Allocation, you can compare the effects of market volatilities on One Choice 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 One Choice with a short position of Calvert Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Choice and Calvert Aggressive.

Diversification Opportunities for One Choice and Calvert Aggressive

0.82

Correlation Coefficient

One Choice  Calvert Aggressive

Very poor diversification

The 3 months correlation between One and Calvert is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding One Choice Portfolio and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and One Choice 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 One Choice Portfolio 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 One Choice i.e., One Choice and Calvert Aggressive go up and down completely randomly.

Pair Corralation between One Choice and Calvert Aggressive

Assuming the 90 days horizon One Choice Portfolio is expected to generate 0.51 times more return on investment than Calvert Aggressive. However, One Choice Portfolio is 1.95 times less risky than Calvert Aggressive. It trades about 0.04 of its potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.0 per unit of risk. If you would invest  1,310  in One Choice Portfolio on December 28, 2024 and sell it today you would earn a total of  12.00  from holding One Choice Portfolio or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

One Choice Portfolio  vs.  Calvert Aggressive Allocation

One Choice Portfolio

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in One Choice Portfolio are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, One Choice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Aggressive

Risk-Adjusted Performance

Very Weak

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

Pair Trading with One Choice and Calvert Aggressive

The main advantage of trading using opposite One Choice and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Choice 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.

The idea behind One Choice Portfolio and Calvert Aggressive Allocation 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.