Correlation Between Calvert Floating and Capital Management
Can any of the company-specific risk be diversified away by investing in both Calvert Floating and Capital Management 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 Capital Management 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 Capital Management Mid Cap, you can compare the effects of market volatilities on Calvert Floating and Capital Management 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 Capital Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Floating and Capital Management.
Diversification Opportunities for Calvert Floating and Capital Management
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Capital is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Floating Rate Advantag and Capital Management Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Management Mid 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 Capital Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Management Mid has no effect on the direction of Calvert Floating i.e., Calvert Floating and Capital Management go up and down completely randomly.
Pair Corralation between Calvert Floating and Capital Management
Assuming the 90 days horizon Calvert Floating is expected to generate 1.04 times less return on investment than Capital Management. But when comparing it to its historical volatility, Calvert Floating Rate Advantage is 4.86 times less risky than Capital Management. It trades about 0.34 of its potential returns per unit of risk. Capital Management Mid Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,151 in Capital Management Mid Cap on April 29, 2025 and sell it today you would earn a total of 36.00 from holding Capital Management Mid Cap or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Calvert Floating Rate Advantag vs. Capital Management Mid Cap
Performance |
Timeline |
Calvert Floating Rate |
Capital Management Mid |
Calvert Floating and Capital Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calvert Floating and Capital Management
The main advantage of trading using opposite Calvert Floating and Capital Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Floating position performs unexpectedly, Capital Management 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 Capital Management will offset losses from the drop in Capital Management's long position.Calvert Floating vs. Columbia International Value | Calvert Floating vs. Calvert Moderate Allocation | Calvert Floating vs. Calvert Developed Market | Calvert Floating vs. Calvert International Responsible |
Capital Management vs. Lord Abbett Short | Capital Management vs. Buffalo High Yield | Capital Management vs. Strategic Advisers Income | Capital Management vs. Barings High Yield |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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