Correlation Between Calvert Aggressive and Millerhoward High

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

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

Diversification Opportunities for Calvert Aggressive and Millerhoward High

0.26

Correlation Coefficient

Calvert Aggressive  Millerhoward High

Modest diversification

The 3 months correlation between Calvert and Millerhoward is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and Millerhoward High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millerhoward High Income and Calvert Aggressive 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 Calvert Aggressive Allocation are associated (or correlated) with Millerhoward High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millerhoward High Income has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and Millerhoward High go up and down completely randomly.

Pair Corralation between Calvert Aggressive and Millerhoward High

Assuming the 90 days horizon Calvert Aggressive is expected to generate 1.15 times less return on investment than Millerhoward High. In addition to that, Calvert Aggressive is 1.23 times more volatile than Millerhoward High Income. It trades about 0.07 of its total potential returns per unit of risk. Millerhoward High Income is currently generating about 0.1 per unit of volatility. If you would invest  1,106  in Millerhoward High Income on October 9, 2024 and sell it today you would earn a total of  158.00  from holding Millerhoward High Income or generate 14.29% return on investment over 90 days.

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

Calvert Aggressive Allocation  vs.  Millerhoward High Income

Calvert Aggressive

Risk-Adjusted Performance

0 of 100

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 basic indicators, Calvert Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Millerhoward High Income

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Millerhoward High Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Millerhoward High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Aggressive and Millerhoward High

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

The idea behind Calvert Aggressive Allocation and Millerhoward High Income 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.