Correlation Between Value Fund and Calvert Bond

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

By analyzing existing cross correlation between Value Fund Value and Calvert Bond Portfolio, you can compare the effects of market volatilities on Value Fund and Calvert 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 Value Fund with a short position of Calvert Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Calvert Bond.

Diversification Opportunities for Value Fund and Calvert Bond

0.74

Correlation Coefficient

Value Fund  Calvert Bond

Poor diversification

The 3 months correlation between Value and Calvert is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Value and Calvert Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Bond Portfolio and Value Fund 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 Value Fund Value are associated (or correlated) with Calvert Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Bond Portfolio has no effect on the direction of Value Fund i.e., Value Fund and Calvert Bond go up and down completely randomly.

Pair Corralation between Value Fund and Calvert Bond

Assuming the 90 days horizon Value Fund Value is expected to generate 2.56 times more return on investment than Calvert Bond. However, Value Fund is 2.56 times more volatile than Calvert Bond Portfolio. It trades about 0.09 of its potential returns per unit of risk. Calvert Bond Portfolio is currently generating about 0.15 per unit of risk. If you would invest  1,916  in Value Fund Value on May 19, 2025 and sell it today you would earn a total of  80.00  from holding Value Fund Value or generate 4.18% return on investment over 90 days.

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

Value Fund Value  vs.  Calvert Bond Portfolio

Value Fund Value

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Value Fund Value are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Value Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 12 (%) 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.

Pair Trading with Value Fund and Calvert Bond

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

The idea behind Value Fund Value and Calvert Bond Portfolio 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.