Correlation Between Nasdaq and Calvert Aggressive
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Calvert Aggressive 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 Nasdaq and Calvert Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Calvert Aggressive Allocation, you can compare the effects of market volatilities on Nasdaq and Calvert Aggressive 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 Nasdaq with a short position of Calvert Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Calvert Aggressive.
Diversification Opportunities for Nasdaq and Calvert Aggressive
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and Calvert is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of Nasdaq i.e., Nasdaq and Calvert Aggressive go up and down completely randomly.
Pair Corralation between Nasdaq and Calvert Aggressive
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.69 times more return on investment than Calvert Aggressive. However, Nasdaq is 1.69 times more volatile than Calvert Aggressive Allocation. It trades about 0.19 of its potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.07 per unit of risk. If you would invest 5,988 in Nasdaq Inc on September 26, 2024 and sell it today you would earn a total of 1,904 from holding Nasdaq Inc or generate 31.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.21% |
Values | Daily Returns |
Nasdaq Inc vs. Calvert Aggressive Allocation
Performance |
Timeline |
Nasdaq Inc |
Calvert Aggressive |
Nasdaq and Calvert Aggressive Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq and Calvert Aggressive
The main advantage of trading using opposite Nasdaq and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Calvert Aggressive 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 Aggressive will offset losses from the drop in Calvert Aggressive's long position.The idea behind Nasdaq Inc and Calvert Aggressive Allocation 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.Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Short Duration | Calvert Aggressive vs. Calvert International Responsible |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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