Correlation Between Calvert Short and Growth Fund

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

By analyzing existing cross correlation between Calvert Short Duration and Growth Fund C, you can compare the effects of market volatilities on Calvert Short and Growth Fund 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 Short with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Short and Growth Fund.

Diversification Opportunities for Calvert Short and Growth Fund

-0.73

Correlation Coefficient

Calvert Short  Growth Fund

Pay attention - limited upside

The 3 months correlation between Calvert and Growth is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Short Duration and Growth Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund C and Calvert Short 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 Short Duration are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund C has no effect on the direction of Calvert Short i.e., Calvert Short and Growth Fund go up and down completely randomly.

Pair Corralation between Calvert Short and Growth Fund

Assuming the 90 days horizon Calvert Short Duration is expected to generate 0.08 times more return on investment than Growth Fund. However, Calvert Short Duration is 11.97 times less risky than Growth Fund. It trades about 0.24 of its potential returns per unit of risk. Growth Fund C is currently generating about -0.13 per unit of risk. If you would invest  1,538  in Calvert Short Duration on December 22, 2024 and sell it today you would earn a total of  27.00  from holding Calvert Short Duration or generate 1.76% return on investment over 90 days.

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

Calvert Short Duration  vs.  Growth Fund C

Calvert Short Duration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Short Duration are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Growth Fund C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Growth Fund C has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Calvert Short and Growth Fund

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

The idea behind Calvert Short Duration and Growth Fund C 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.