Correlation Between Calvert Conservative and Short-term Fund

Can any of the company-specific risk be diversified away by investing in both Calvert Conservative and Short-term 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 Conservative and Short-term Fund 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 Short Term Fund Administrative, you can compare the effects of market volatilities on Calvert Conservative and Short-term 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 Conservative with a short position of Short-term Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and Short-term Fund.

Diversification Opportunities for Calvert Conservative and Short-term Fund

-0.23

Correlation Coefficient

Calvert Conservative  Short-term Fund

Very good diversification

The 3 months correlation between Calvert and Short-term is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Short Term Fund Administrative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Fund 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 Short-term Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Fund has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Short-term Fund go up and down completely randomly.

Pair Corralation between Calvert Conservative and Short-term Fund

Assuming the 90 days horizon Calvert Conservative Allocation is expected to generate 4.28 times more return on investment than Short-term Fund. However, Calvert Conservative is 4.28 times more volatile than Short Term Fund Administrative. It trades about 0.07 of its potential returns per unit of risk. Short Term Fund Administrative is currently generating about 0.2 per unit of risk. If you would invest  1,695  in Calvert Conservative Allocation on October 8, 2024 and sell it today you would earn a total of  89.00  from holding Calvert Conservative Allocation or generate 5.25% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Short Term Fund Administrative

Calvert Conservative

Risk-Adjusted Performance

0 of 100

Very 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.

Short Term Fund

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Short Term Fund Administrative are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Short-term Fund 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 Short-term Fund

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

The idea behind Calvert Conservative Allocation and Short Term Fund Administrative 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.