Correlation Between Guidepath Conservative and Calvert Floating-rate

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

By analyzing existing cross correlation between Guidepath Conservative Income and Calvert Floating Rate Advantage, you can compare the effects of market volatilities on Guidepath Conservative and Calvert Floating-rate 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 Guidepath Conservative with a short position of Calvert Floating-rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath Conservative and Calvert Floating-rate.

Diversification Opportunities for Guidepath Conservative and Calvert Floating-rate

0.86

Correlation Coefficient

Guidepath Conservative  Calvert Floating-rate

Very poor diversification

The 3 months correlation between Guidepath and Calvert is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Conservative Income and Calvert Floating Rate Advantag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Floating Rate and Guidepath Conservative 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 Guidepath Conservative Income are associated (or correlated) with Calvert Floating-rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Floating Rate has no effect on the direction of Guidepath Conservative i.e., Guidepath Conservative and Calvert Floating-rate go up and down completely randomly.

Pair Corralation between Guidepath Conservative and Calvert Floating-rate

Assuming the 90 days horizon Guidepath Conservative is expected to generate 5.99 times less return on investment than Calvert Floating-rate. But when comparing it to its historical volatility, Guidepath Conservative Income is 2.2 times less risky than Calvert Floating-rate. It trades about 0.12 of its potential returns per unit of risk. Calvert Floating Rate Advantage is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  851.00  in Calvert Floating Rate Advantage on April 28, 2025 and sell it today you would earn a total of  27.00  from holding Calvert Floating Rate Advantage or generate 3.17% return on investment over 90 days.

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

Guidepath Conservative Income  vs.  Calvert Floating Rate Advantag

Guidepath Conservative

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Conservative Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Guidepath Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Floating Rate

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Floating Rate Advantage are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Floating-rate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guidepath Conservative and Calvert Floating-rate

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

The idea behind Guidepath Conservative Income and Calvert Floating Rate Advantage 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.