Correlation Between Enhanced Fixed and Calvert Conservative

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

By analyzing existing cross correlation between Enhanced Fixed Income and Calvert Servative Allocation, you can compare the effects of market volatilities on Enhanced Fixed and Calvert Conservative 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 Enhanced Fixed with a short position of Calvert Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced Fixed and Calvert Conservative.

Diversification Opportunities for Enhanced Fixed and Calvert Conservative

0.87

Correlation Coefficient

Enhanced Fixed  Calvert Conservative

Very poor diversification

The 3 months correlation between Enhanced and Calvert is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Fixed Income and Calvert Servative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Conservative and Enhanced Fixed 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 Enhanced Fixed Income are associated (or correlated) with Calvert Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Conservative has no effect on the direction of Enhanced Fixed i.e., Enhanced Fixed and Calvert Conservative go up and down completely randomly.

Pair Corralation between Enhanced Fixed and Calvert Conservative

Assuming the 90 days horizon Enhanced Fixed is expected to generate 2.33 times less return on investment than Calvert Conservative. In addition to that, Enhanced Fixed is 1.13 times more volatile than Calvert Servative Allocation. It trades about 0.06 of its total potential returns per unit of risk. Calvert Servative Allocation is currently generating about 0.15 per unit of volatility. If you would invest  1,804  in Calvert Servative Allocation on July 14, 2025 and sell it today you would earn a total of  47.00  from holding Calvert Servative Allocation or generate 2.61% return on investment over 90 days.

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

Enhanced Fixed Income  vs.  Calvert Servative Allocation

Enhanced Fixed Income

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Enhanced Fixed Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Enhanced Fixed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Conservative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Servative Allocation are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enhanced Fixed and Calvert Conservative

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

The idea behind Enhanced Fixed Income and Calvert Servative Allocation 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.