Correlation Between Calvert Moderate and Upright Growth

Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Upright Growth 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 Upright Growth 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 Upright Growth Fund, you can compare the effects of market volatilities on Calvert Moderate and Upright Growth 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 Upright Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Upright Growth.

Diversification Opportunities for Calvert Moderate and Upright Growth

0.39

Correlation Coefficient

Calvert Moderate  Upright Growth

Weak diversification

The 3 months correlation between Calvert and Upright is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Upright Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upright Growth 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 Upright Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upright Growth has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Upright Growth go up and down completely randomly.

Pair Corralation between Calvert Moderate and Upright Growth

Assuming the 90 days horizon Calvert Moderate Allocation is expected to under-perform the Upright Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Moderate Allocation is 3.55 times less risky than Upright Growth. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Upright Growth Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  930.00  in Upright Growth Fund on September 20, 2024 and sell it today you would earn a total of  127.00  from holding Upright Growth Fund or generate 13.66% return on investment over 90 days.

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

Calvert Moderate Allocation  vs.  Upright Growth Fund

Calvert Moderate All

Risk-Adjusted Performance

0 of 100

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.

Upright Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Growth Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Upright Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Moderate and Upright Growth

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

The idea behind Calvert Moderate Allocation and Upright Growth 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.