Correlation Between Calvert Conservative and Investment Managers

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

Diversification Opportunities for Calvert Conservative and Investment Managers

-0.04

Correlation Coefficient

Calvert Conservative  Investment Managers

Good diversification

The 3 months correlation between Calvert and Investment is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Investment Managers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Managers 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 Investment Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Managers has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Investment Managers go up and down completely randomly.

Pair Corralation between Calvert Conservative and Investment Managers

Assuming the 90 days horizon Calvert Conservative is expected to generate 3.95 times less return on investment than Investment Managers. But when comparing it to its historical volatility, Calvert Conservative Allocation is 2.32 times less risky than Investment Managers. It trades about 0.09 of its potential returns per unit of risk. Investment Managers Series is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,398  in Investment Managers Series on September 3, 2024 and sell it today you would earn a total of  93.00  from holding Investment Managers Series or generate 6.65% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Investment Managers Series

Calvert Conservative

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Conservative Allocation are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. 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.

Investment Managers

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investment Managers Series are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Investment Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Calvert Conservative and Investment Managers

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

The idea behind Calvert Conservative Allocation and Investment Managers Series 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.