Correlation Between American Funds and Calvert Equity
Can any of the company-specific risk be diversified away by investing in both American Funds and Calvert Equity 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 American Funds and Calvert Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Calvert Equity Portfolio, you can compare the effects of market volatilities on American Funds and Calvert Equity 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 American Funds with a short position of Calvert Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Equity.
Diversification Opportunities for American Funds and Calvert Equity
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Calvert is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Calvert Equity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Equity Portfolio and American Funds 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 American Funds The are associated (or correlated) with Calvert Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Equity Portfolio has no effect on the direction of American Funds i.e., American Funds and Calvert Equity go up and down completely randomly.
Pair Corralation between American Funds and Calvert Equity
Assuming the 90 days horizon American Funds The is expected to generate 0.76 times more return on investment than Calvert Equity. However, American Funds The is 1.32 times less risky than Calvert Equity. It trades about -0.01 of its potential returns per unit of risk. Calvert Equity Portfolio is currently generating about -0.12 per unit of risk. If you would invest 7,866 in American Funds The on October 22, 2024 and sell it today you would lose (183.00) from holding American Funds The or give up 2.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
American Funds The vs. Calvert Equity Portfolio
Performance |
Timeline |
American Funds |
Calvert Equity Portfolio |
American Funds and Calvert Equity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Calvert Equity
The main advantage of trading using opposite American Funds and Calvert Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Calvert Equity 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 Calvert Equity will offset losses from the drop in Calvert Equity's long position.American Funds vs. Artisan High Income | American Funds vs. Virtus High Yield | American Funds vs. Multi Manager High Yield | American Funds vs. Simt High Yield |
Calvert Equity vs. Janus Investment | Calvert Equity vs. Ashmore Emerging Markets | Calvert Equity vs. Jpmorgan Trust Iv | Calvert Equity vs. Fidelity Government Money |
Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |