Correlation Between Calvert Moderate and Astor Star

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

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

Diversification Opportunities for Calvert Moderate and Astor Star

0.34

Correlation Coefficient

Calvert Moderate  Astor Star

Weak diversification

The 3 months correlation between Calvert and Astor is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Astor Star Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Star Fund and Calvert Moderate 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 Moderate Allocation are associated (or correlated) with Astor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Star Fund has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Astor Star go up and down completely randomly.

Pair Corralation between Calvert Moderate and Astor Star

Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 0.72 times more return on investment than Astor Star. However, Calvert Moderate Allocation is 1.39 times less risky than Astor Star. It trades about -0.02 of its potential returns per unit of risk. Astor Star Fund is currently generating about -0.07 per unit of risk. If you would invest  2,054  in Calvert Moderate Allocation on December 20, 2024 and sell it today you would lose (19.00) from holding Calvert Moderate Allocation or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Calvert Moderate Allocation  vs.  Astor Star Fund

Calvert Moderate All

Risk-Adjusted Performance

Very Weak

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

Astor Star Fund

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Calvert Moderate Allocation and Astor Star 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.