Correlation Between Congressional Effect and Calvert Short
Can any of the company-specific risk be diversified away by investing in both Congressional Effect and Calvert Short 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 Congressional Effect and Calvert Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Congressional Effect Fund and Calvert Short Duration, you can compare the effects of market volatilities on Congressional Effect and Calvert Short 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 Congressional Effect with a short position of Calvert Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Congressional Effect and Calvert Short.
Diversification Opportunities for Congressional Effect and Calvert Short
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Congressional and Calvert is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Congressional Effect Fund and Calvert Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Short Duration and Congressional Effect 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 Congressional Effect Fund are associated (or correlated) with Calvert Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Short Duration has no effect on the direction of Congressional Effect i.e., Congressional Effect and Calvert Short go up and down completely randomly.
Pair Corralation between Congressional Effect and Calvert Short
Assuming the 90 days horizon Congressional Effect Fund is expected to generate 7.7 times more return on investment than Calvert Short. However, Congressional Effect is 7.7 times more volatile than Calvert Short Duration. It trades about 0.0 of its potential returns per unit of risk. Calvert Short Duration is currently generating about -0.11 per unit of risk. If you would invest 1,160 in Congressional Effect Fund on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Congressional Effect Fund or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Congressional Effect Fund vs. Calvert Short Duration
Performance |
Timeline |
Congressional Effect |
Calvert Short Duration |
Congressional Effect and Calvert Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Congressional Effect and Calvert Short
The main advantage of trading using opposite Congressional Effect and Calvert Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Congressional Effect position performs unexpectedly, Calvert Short 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 Short will offset losses from the drop in Calvert Short's long position.The idea behind Congressional Effect Fund and Calvert Short Duration 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.
Calvert Short vs. Calvert Short Duration | Calvert Short vs. Calvert Income Fund | Calvert Short vs. Calvert Long Term Income | Calvert Short vs. Calvert Small Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |