Correlation Between Calvert Unconstrained and Oklahoma Municipal

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

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

Diversification Opportunities for Calvert Unconstrained and Oklahoma Municipal

0.86

Correlation Coefficient

Calvert Unconstrained  Oklahoma Municipal

Very poor diversification

The 3 months correlation between Calvert and Oklahoma is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Unconstrained Bond and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Calvert Unconstrained 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 Unconstrained Bond are associated (or correlated) with Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Calvert Unconstrained i.e., Calvert Unconstrained and Oklahoma Municipal go up and down completely randomly.

Pair Corralation between Calvert Unconstrained and Oklahoma Municipal

Assuming the 90 days horizon Calvert Unconstrained Bond is expected to generate 0.54 times more return on investment than Oklahoma Municipal. However, Calvert Unconstrained Bond is 1.84 times less risky than Oklahoma Municipal. It trades about -0.19 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about -0.3 per unit of risk. If you would invest  1,461  in Calvert Unconstrained Bond on September 27, 2024 and sell it today you would lose (9.00) from holding Calvert Unconstrained Bond or give up 0.62% of portfolio value over 90 days.

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

Calvert Unconstrained Bond  vs.  Oklahoma Municipal Fund

Calvert Unconstrained

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oklahoma Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oklahoma Municipal Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Oklahoma Municipal 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 Unconstrained and Oklahoma Municipal

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

The idea behind Calvert Unconstrained Bond and Oklahoma Municipal 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.