Correlation Between Calvert Ultra and DEUTSCHE

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

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

Diversification Opportunities for Calvert Ultra and DEUTSCHE

-0.48

Correlation Coefficient

Calvert Ultra  DEUTSCHE

Very good diversification

The 3 months correlation between Calvert and DEUTSCHE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Ultra Short Income and DEUTSCHE BANK AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE BANK AG and Calvert Ultra 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 Ultra Short Income are associated (or correlated) with DEUTSCHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE BANK AG has no effect on the direction of Calvert Ultra i.e., Calvert Ultra and DEUTSCHE go up and down completely randomly.

Pair Corralation between Calvert Ultra and DEUTSCHE

Assuming the 90 days horizon Calvert Ultra is expected to generate 108.5 times less return on investment than DEUTSCHE. But when comparing it to its historical volatility, Calvert Ultra Short Income is 531.34 times less risky than DEUTSCHE. It trades about 0.22 of its potential returns per unit of risk. DEUTSCHE BANK AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8,952  in DEUTSCHE BANK AG on September 24, 2024 and sell it today you would earn a total of  0.00  from holding DEUTSCHE BANK AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.67%
Values	Daily Returns

Calvert Ultra Short Income  vs.  DEUTSCHE BANK AG

Calvert Ultra Short

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Ultra Short Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DEUTSCHE BANK AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DEUTSCHE BANK AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DEUTSCHE BANK AG investors.

Pair Trading with Calvert Ultra and DEUTSCHE

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

The idea behind Calvert Ultra Short Income and DEUTSCHE BANK AG 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.