Correlation Between Calvert Bond and Intermediate Bond
Can any of the company-specific risk be diversified away by investing in both Calvert Bond and Intermediate Bond 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 Bond 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 Bond Fund, you can compare the effects of market volatilities on Calvert Bond and Intermediate Bond 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 Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Bond and Intermediate Bond.
Diversification Opportunities for Calvert Bond and Intermediate Bond
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and Intermediate is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Bond Portfolio and Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate 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 Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Bond has no effect on the direction of Calvert Bond i.e., Calvert Bond and Intermediate Bond go up and down completely randomly.
Pair Corralation between Calvert Bond and Intermediate Bond
Assuming the 90 days horizon Calvert Bond Portfolio is expected to generate 1.25 times more return on investment than Intermediate Bond. However, Calvert Bond is 1.25 times more volatile than Intermediate Bond Fund. It trades about 0.1 of its potential returns per unit of risk. Intermediate Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 1,414 in Calvert Bond Portfolio on April 14, 2025 and sell it today you would earn a total of 25.00 from holding Calvert Bond Portfolio or generate 1.77% 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 Bond Fund
Performance |
Timeline |
Calvert Bond Portfolio |
Intermediate Bond |
Calvert Bond and Intermediate Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calvert Bond and Intermediate Bond
The main advantage of trading using opposite Calvert Bond and Intermediate Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Bond position performs unexpectedly, Intermediate Bond 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 Bond will offset losses from the drop in Intermediate Bond's long position.Calvert Bond vs. Calvert Developed Market | Calvert Bond vs. Calvert Developed Market | Calvert Bond vs. Calvert Short Duration | Calvert Bond vs. Calvert International Responsible |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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