Correlation Between Calvert Conservative and Aberdeen Ultra

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

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

Diversification Opportunities for Calvert Conservative and Aberdeen Ultra

0.55

Correlation Coefficient

Calvert Conservative  Aberdeen Ultra

Very weak diversification

The 3 months correlation between Calvert and Aberdeen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Aberdeen Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Ultra Short and Calvert Conservative 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 Conservative Allocation are associated (or correlated) with Aberdeen Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Ultra Short has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Aberdeen Ultra go up and down completely randomly.

Pair Corralation between Calvert Conservative and Aberdeen Ultra

Assuming the 90 days horizon Calvert Conservative is expected to generate 16.0 times less return on investment than Aberdeen Ultra. In addition to that, Calvert Conservative is 6.57 times more volatile than Aberdeen Ultra Short. It trades about 0.0 of its total potential returns per unit of risk. Aberdeen Ultra Short is currently generating about 0.2 per unit of volatility. If you would invest  1,002  in Aberdeen Ultra Short on December 30, 2024 and sell it today you would earn a total of  7.00  from holding Aberdeen Ultra Short or generate 0.7% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Aberdeen Ultra Short

Calvert Conservative

Risk-Adjusted Performance

Weak

Over the last 90 days Calvert Conservative Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Calvert Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aberdeen Ultra Short

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Ultra Short are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Aberdeen Ultra 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 Conservative and Aberdeen Ultra

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

The idea behind Calvert Conservative Allocation and Aberdeen Ultra Short 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.