Correlation Between Calvert Bond and Intermediate Term
Can any of the company-specific risk be diversified away by investing in both Calvert Bond and Intermediate Term 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 Bond and Intermediate Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Bond Portfolio and Intermediate Term Bond Fund, you can compare the effects of market volatilities on Calvert Bond and Intermediate Term 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 Bond with a short position of Intermediate Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Bond and Intermediate Term.
Diversification Opportunities for Calvert Bond and Intermediate Term
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and Intermediate is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Bond Portfolio and Intermediate Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Bond and Calvert Bond 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 Bond Portfolio are associated (or correlated) with Intermediate Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Bond has no effect on the direction of Calvert Bond i.e., Calvert Bond and Intermediate Term go up and down completely randomly.
Pair Corralation between Calvert Bond and Intermediate Term
Assuming the 90 days horizon Calvert Bond is expected to generate 1.13 times less return on investment than Intermediate Term. But when comparing it to its historical volatility, Calvert Bond Portfolio is 1.02 times less risky than Intermediate Term. It trades about 0.14 of its potential returns per unit of risk. Intermediate Term Bond Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 893.00 in Intermediate Term Bond Fund on April 11, 2025 and sell it today you would earn a total of 26.00 from holding Intermediate Term Bond Fund or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Bond Portfolio vs. Intermediate Term Bond Fund
Performance |
| Timeline |
| Calvert Bond Portfolio |
| Intermediate Term Bond |
Calvert Bond and Intermediate Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Bond and Intermediate Term
The main advantage of trading using opposite Calvert Bond and Intermediate Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Bond position performs unexpectedly, Intermediate Term 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 Intermediate Term will offset losses from the drop in Intermediate Term's long position.| Calvert Bond vs. Allianzgi Diversified Income | Calvert Bond vs. Aqr Diversified Arbitrage | Calvert Bond vs. Diversified Tax Exempt | Calvert Bond vs. Mainstay Conservative Allocation |
| Intermediate Term vs. Capital Growth Fund | Intermediate Term vs. Emerging Markets Fund | Intermediate Term vs. High Income Fund | Intermediate Term vs. International Fund International |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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