Correlation Between Calvert Aggressive and Sextant Growth
Can any of the company-specific risk be diversified away by investing in both Calvert Aggressive and Sextant Growth 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 Sextant Growth 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 Sextant Growth Fund, you can compare the effects of market volatilities on Calvert Aggressive and Sextant Growth 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 Sextant Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Aggressive and Sextant Growth.
Diversification Opportunities for Calvert Aggressive and Sextant Growth
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Sextant is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and Sextant Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Growth 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 Sextant Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Growth has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and Sextant Growth go up and down completely randomly.
Pair Corralation between Calvert Aggressive and Sextant Growth
Assuming the 90 days horizon Calvert Aggressive Allocation is expected to generate 0.66 times more return on investment than Sextant Growth. However, Calvert Aggressive Allocation is 1.53 times less risky than Sextant Growth. It trades about -0.08 of its potential returns per unit of risk. Sextant Growth Fund is currently generating about -0.12 per unit of risk. If you would invest 2,818 in Calvert Aggressive Allocation on December 4, 2024 and sell it today you would lose (99.00) from holding Calvert Aggressive Allocation or give up 3.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.33% |
Values | Daily Returns |
Calvert Aggressive Allocation vs. Sextant Growth Fund
Performance |
Timeline |
Calvert Aggressive |
Sextant Growth |
Calvert Aggressive and Sextant Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calvert Aggressive and Sextant Growth
The main advantage of trading using opposite Calvert Aggressive and Sextant Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Aggressive position performs unexpectedly, Sextant Growth 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 Sextant Growth will offset losses from the drop in Sextant Growth's long position.Calvert Aggressive vs. Victory Incore Investment | Calvert Aggressive vs. Advent Claymore Convertible | Calvert Aggressive vs. Invesco Vertible Securities | Calvert Aggressive vs. Invesco Vertible Securities |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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