Correlation Between Vanguard Multi and Calvert Bond

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

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

Diversification Opportunities for Vanguard Multi and Calvert Bond

0.62

Correlation Coefficient

Vanguard Multi  Calvert Bond

Poor diversification

The 3 months correlation between Vanguard and Calvert is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Multi Sector Income 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 Vanguard Multi 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 Vanguard Multi Sector Income 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 Vanguard Multi i.e., Vanguard Multi and Calvert Bond go up and down completely randomly.

Pair Corralation between Vanguard Multi and Calvert Bond

Assuming the 90 days horizon Vanguard Multi Sector Income is expected to generate 0.6 times more return on investment than Calvert Bond. However, Vanguard Multi Sector Income is 1.67 times less risky than Calvert Bond. It trades about 0.37 of its potential returns per unit of risk. Calvert Bond Portfolio is currently generating about 0.11 per unit of risk. If you would invest  877.00  in Vanguard Multi Sector Income on April 20, 2025 and sell it today you would earn a total of  36.00  from holding Vanguard Multi Sector Income or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Vanguard Multi Sector Income  vs.  Calvert Bond Portfolio

Vanguard Multi Sector

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Multi Sector Income are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Vanguard Multi 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

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Bond Portfolio are ranked lower than 8 (%) 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 Vanguard Multi and Calvert Bond

The main advantage of trading using opposite Vanguard Multi and Calvert Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Multi 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 Vanguard Multi Sector Income 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.