Correlation Between Calvert Conservative and Dimensional Retirement

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

By analyzing existing cross correlation between Calvert Conservative Allocation and Dimensional Retirement Income, you can compare the effects of market volatilities on Calvert Conservative and Dimensional Retirement 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 Conservative with a short position of Dimensional Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and Dimensional Retirement.

Diversification Opportunities for Calvert Conservative and Dimensional Retirement

0.88

Correlation Coefficient

Calvert Conservative  Dimensional Retirement

Very poor diversification

The 3 months correlation between Calvert and Dimensional is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Dimensional Retirement Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Retirement and Calvert Conservative 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 Conservative Allocation are associated (or correlated) with Dimensional Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Retirement has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Dimensional Retirement go up and down completely randomly.

Pair Corralation between Calvert Conservative and Dimensional Retirement

Assuming the 90 days horizon Calvert Conservative Allocation is expected to generate 1.57 times more return on investment than Dimensional Retirement. However, Calvert Conservative is 1.57 times more volatile than Dimensional Retirement Income. It trades about 0.11 of its potential returns per unit of risk. Dimensional Retirement Income is currently generating about 0.12 per unit of risk. If you would invest  1,607  in Calvert Conservative Allocation on September 23, 2024 and sell it today you would earn a total of  197.00  from holding Calvert Conservative Allocation or generate 12.26% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Dimensional Retirement Income

Calvert Conservative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dimensional Retirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional Retirement Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Dimensional Retirement 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 Conservative and Dimensional Retirement

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

The idea behind Calvert Conservative Allocation and Dimensional Retirement Income 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.