Correlation Between Floating Rate and Calvert Floating
Can any of the company-specific risk be diversified away by investing in both Floating Rate and Calvert Floating 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 Floating Rate and Calvert Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Calvert Floating Rate Advantage, you can compare the effects of market volatilities on Floating Rate and Calvert Floating 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 Floating Rate with a short position of Calvert Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Calvert Floating.
Diversification Opportunities for Floating Rate and Calvert Floating
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Floating and Calvert is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund 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 Floating Rate 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 Floating Rate Fund are associated (or correlated) with Calvert Floating. 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 Floating Rate i.e., Floating Rate and Calvert Floating go up and down completely randomly.
Pair Corralation between Floating Rate and Calvert Floating
Assuming the 90 days horizon Floating Rate Fund is expected to generate 0.95 times more return on investment than Calvert Floating. However, Floating Rate Fund is 1.05 times less risky than Calvert Floating. It trades about 0.37 of its potential returns per unit of risk. Calvert Floating Rate Advantage is currently generating about 0.34 per unit of risk. If you would invest 784.00 in Floating Rate Fund on April 25, 2025 and sell it today you would earn a total of 26.00 from holding Floating Rate Fund or generate 3.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Floating Rate Fund vs. Calvert Floating Rate Advantag
Performance |
Timeline |
Floating Rate |
Calvert Floating Rate |
Floating Rate and Calvert Floating Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Floating Rate and Calvert Floating
The main advantage of trading using opposite Floating Rate and Calvert Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate position performs unexpectedly, Calvert Floating 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 will offset losses from the drop in Calvert Floating's long position.Floating Rate vs. Nuveen Large Cap | Floating Rate vs. American Mutual Fund | Floating Rate vs. Old Westbury Large | Floating Rate vs. Tax Managed Large Cap |
Calvert Floating vs. Goldman Sachs Trust | Calvert Floating vs. Icon Financial Fund | Calvert Floating vs. Financials Ultrasector Profund | Calvert Floating vs. Davis Financial Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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