Correlation Between Calvert Aggressive and Pimco Income

Can any of the company-specific risk be diversified away by investing in both Calvert Aggressive and Pimco Income 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 Pimco Income 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 Pimco Income Strategy, you can compare the effects of market volatilities on Calvert Aggressive and Pimco Income 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 Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Aggressive and Pimco Income.

Diversification Opportunities for Calvert Aggressive and Pimco Income

0.2

Correlation Coefficient

Calvert Aggressive  Pimco Income

Modest diversification

The 3 months correlation between Calvert and Pimco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy 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 Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and Pimco Income go up and down completely randomly.

Pair Corralation between Calvert Aggressive and Pimco Income

Assuming the 90 days horizon Calvert Aggressive is expected to generate 1.38 times less return on investment than Pimco Income. But when comparing it to its historical volatility, Calvert Aggressive Allocation is 1.1 times less risky than Pimco Income. It trades about 0.05 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  598.00  in Pimco Income Strategy on October 7, 2024 and sell it today you would earn a total of  152.00  from holding Pimco Income Strategy or generate 25.42% 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.  Pimco Income Strategy

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 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.

Pimco Income Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Income Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Pimco Income is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Calvert Aggressive and Pimco Income

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

The idea behind Calvert Aggressive Allocation and Pimco Income Strategy 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.