Correlation Between Calvert Bond and The Short-term

Can any of the company-specific risk be diversified away by investing in both Calvert Bond and The Short-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 The Short-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 The Short Term Municipal, you can compare the effects of market volatilities on Calvert Bond and The Short-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 The Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Bond and The Short-term.

Diversification Opportunities for Calvert Bond and The Short-term

0.91

Correlation Coefficient

Calvert Bond  The Short-term

Almost no diversification

The 3 months correlation between Calvert and The is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Bond Portfolio and The Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Short-term 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 The Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Short-term has no effect on the direction of Calvert Bond i.e., Calvert Bond and The Short-term go up and down completely randomly.

Pair Corralation between Calvert Bond and The Short-term

Assuming the 90 days horizon Calvert Bond Portfolio is expected to generate 4.06 times more return on investment than The Short-term. However, Calvert Bond is 4.06 times more volatile than The Short Term Municipal. It trades about 0.18 of its potential returns per unit of risk. The Short Term Municipal is currently generating about 0.3 per unit of risk. If you would invest  1,413  in Calvert Bond Portfolio on May 28, 2025 and sell it today you would earn a total of  44.00  from holding Calvert Bond Portfolio or generate 3.11% 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.  The Short Term Municipal

Calvert Bond Portfolio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Bond Portfolio are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Short-term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Short Term Municipal are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, The Short-term 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 Bond and The Short-term

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

The idea behind Calvert Bond Portfolio and The Short Term Municipal 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.