Correlation Between Calvert Income and Vanguard Intermediate-ter

Can any of the company-specific risk be diversified away by investing in both Calvert Income and Vanguard Intermediate-ter 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 Intermediate-ter 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 Intermediate Term Porate, you can compare the effects of market volatilities on Calvert Income and Vanguard Intermediate-ter 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 Intermediate-ter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Income and Vanguard Intermediate-ter.

Diversification Opportunities for Calvert Income and Vanguard Intermediate-ter

0.99

Correlation Coefficient

Calvert Income  Vanguard Intermediate-ter

No risk reduction

The 3 months correlation between CALVERT and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Income Fund and Vanguard Intermediate Term Por in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate-ter 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 Intermediate-ter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate-ter has no effect on the direction of Calvert Income i.e., Calvert Income and Vanguard Intermediate-ter go up and down completely randomly.

Pair Corralation between Calvert Income and Vanguard Intermediate-ter

Assuming the 90 days horizon Calvert Income is expected to generate 1.25 times less return on investment than Vanguard Intermediate-ter. But when comparing it to its historical volatility, Calvert Income Fund is 1.16 times less risky than Vanguard Intermediate-ter. It trades about 0.12 of its potential returns per unit of risk. Vanguard Intermediate Term Porate is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,190  in Vanguard Intermediate Term Porate on September 3, 2024 and sell it today you would earn a total of  20.00  from holding Vanguard Intermediate Term Porate or generate 0.91% return on investment over 90 days.

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

Calvert Income Fund  vs.  Vanguard Intermediate Term Por

Calvert Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Income Fund has generated negative risk-adjusted returns adding no value to fund investors. 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 Intermediate-ter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Intermediate Term Porate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vanguard Intermediate-ter 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 Intermediate-ter

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

The idea behind Calvert Income Fund and Vanguard Intermediate Term Porate 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.