Correlation Between Calvert Income and Vanguard Windsor

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

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

Diversification Opportunities for Calvert Income and Vanguard Windsor

-0.51

Correlation Coefficient

Calvert Income  Vanguard Windsor

Excellent diversification

The 3 months correlation between Calvert and Vanguard is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Income Fund and Vanguard Windsor Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Windsor and Calvert Income 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 Income Fund are associated (or correlated) with Vanguard Windsor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Windsor has no effect on the direction of Calvert Income i.e., Calvert Income and Vanguard Windsor go up and down completely randomly.

Pair Corralation between Calvert Income and Vanguard Windsor

Assuming the 90 days horizon Calvert Income Fund is expected to generate 0.33 times more return on investment than Vanguard Windsor. However, Calvert Income Fund is 3.05 times less risky than Vanguard Windsor. It trades about 0.15 of its potential returns per unit of risk. Vanguard Windsor Fund is currently generating about -0.01 per unit of risk. If you would invest  1,472  in Calvert Income Fund on December 30, 2024 and sell it today you would earn a total of  33.00  from holding Calvert Income Fund or generate 2.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.94%
Values	Daily Returns

Calvert Income Fund  vs.  Vanguard Windsor Fund

Calvert Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Income Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Windsor

Risk-Adjusted Performance

Weak

Over the last 90 days Vanguard Windsor Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Vanguard Windsor 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 Income and Vanguard Windsor

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

The idea behind Calvert Income Fund and Vanguard Windsor Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.