Correlation Between Calvert Floating and Wells Fargo

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

By analyzing existing cross correlation between Calvert Floating Rate Advantage and Wells Fargo Cb, you can compare the effects of market volatilities on Calvert Floating and Wells Fargo 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 Floating with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Floating and Wells Fargo.

Diversification Opportunities for Calvert Floating and Wells Fargo

0.71

Correlation Coefficient

Calvert Floating  Wells Fargo

Poor diversification

The 3 months correlation between Calvert and Wells is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Floating Rate Advantag and Wells Fargo Cb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Cb and Calvert Floating 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 Floating Rate Advantage are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Cb has no effect on the direction of Calvert Floating i.e., Calvert Floating and Wells Fargo go up and down completely randomly.

Pair Corralation between Calvert Floating and Wells Fargo

If you would invest  837.00  in Calvert Floating Rate Advantage on September 25, 2024 and sell it today you would earn a total of  61.00  from holding Calvert Floating Rate Advantage or generate 7.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

Calvert Floating Rate Advantag  vs.  Wells Fargo Cb

Calvert Floating Rate

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Floating Rate Advantage are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wells Fargo Cb

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wells Fargo Cb has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wells Fargo 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 Floating and Wells Fargo

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

The idea behind Calvert Floating Rate Advantage and Wells Fargo Cb 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.