Correlation Between Federated Short-term and Calvert Short
Can any of the company-specific risk be diversified away by investing in both Federated Short-term and Calvert Short 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 Federated Short-term and Calvert Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Short Term Income and Calvert Short Duration, you can compare the effects of market volatilities on Federated Short-term and Calvert Short 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 Federated Short-term with a short position of Calvert Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-term and Calvert Short.
Diversification Opportunities for Federated Short-term and Calvert Short
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Calvert is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Term Income and Calvert Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Short Duration and Federated Short-term 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 Federated Short Term Income are associated (or correlated) with Calvert Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Short Duration has no effect on the direction of Federated Short-term i.e., Federated Short-term and Calvert Short go up and down completely randomly.
Pair Corralation between Federated Short-term and Calvert Short
Assuming the 90 days horizon Federated Short Term Income is expected to under-perform the Calvert Short. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Short Term Income is 1.09 times less risky than Calvert Short. The mutual fund trades about -0.32 of its potential returns per unit of risk. The Calvert Short Duration is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 1,561 in Calvert Short Duration on October 7, 2024 and sell it today you would lose (7.00) from holding Calvert Short Duration or give up 0.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Short Term Income vs. Calvert Short Duration
Performance |
Timeline |
Federated Short Term |
Calvert Short Duration |
Federated Short-term and Calvert Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Short-term and Calvert Short
The main advantage of trading using opposite Federated Short-term and Calvert Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short-term position performs unexpectedly, Calvert Short 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 Short will offset losses from the drop in Calvert Short's long position.Federated Short-term vs. Clearbridge Energy Mlp | Federated Short-term vs. Fidelity Advisor Energy | Federated Short-term vs. Clearbridge Energy Mlp | Federated Short-term vs. Blackrock All Cap Energy |
Calvert Short vs. Calvert Short Duration | Calvert Short vs. Calvert Short Duration | Calvert Short vs. Calvert Income Fund | Calvert Short vs. Calvert Long Term Income |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |