Correlation Between Calvert Conservative and Wilmington Trust

Can any of the company-specific risk be diversified away by investing in both Calvert Conservative and Wilmington Trust 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 Wilmington Trust 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 Wilmington Trust Retirement, you can compare the effects of market volatilities on Calvert Conservative and Wilmington Trust 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 Wilmington Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and Wilmington Trust.

Diversification Opportunities for Calvert Conservative and Wilmington Trust

0.34

Correlation Coefficient

Calvert Conservative  Wilmington Trust

Weak diversification

The 3 months correlation between Calvert and Wilmington is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Wilmington Trust Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Trust Ret 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 Wilmington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Trust Ret has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Wilmington Trust go up and down completely randomly.

Pair Corralation between Calvert Conservative and Wilmington Trust

Assuming the 90 days horizon Calvert Conservative Allocation is expected to under-perform the Wilmington Trust. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Conservative Allocation is 3.0 times less risky than Wilmington Trust. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Wilmington Trust Retirement is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  32,253  in Wilmington Trust Retirement on September 23, 2024 and sell it today you would earn a total of  163.00  from holding Wilmington Trust Retirement or generate 0.51% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Wilmington Trust Retirement

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.

Wilmington Trust Ret

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Trust Retirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wilmington Trust 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 Wilmington Trust

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

The idea behind Calvert Conservative Allocation and Wilmington Trust Retirement 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.