Correlation Between Calvert Balanced and Scharf Fund

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

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

Diversification Opportunities for Calvert Balanced and Scharf Fund

0.62

Correlation Coefficient

Calvert Balanced  Scharf Fund

Poor diversification

The 3 months correlation between Calvert and Scharf is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio and Scharf Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Fund Retail and Calvert Balanced 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 Balanced Portfolio are associated (or correlated) with Scharf Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Fund Retail has no effect on the direction of Calvert Balanced i.e., Calvert Balanced and Scharf Fund go up and down completely randomly.

Pair Corralation between Calvert Balanced and Scharf Fund

Assuming the 90 days horizon Calvert Balanced is expected to generate 1.14 times less return on investment than Scharf Fund. In addition to that, Calvert Balanced is 1.22 times more volatile than Scharf Fund Retail. It trades about 0.32 of its total potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.44 per unit of volatility. If you would invest  5,010  in Scharf Fund Retail on February 16, 2024 and sell it today you would earn a total of  231.00  from holding Scharf Fund Retail or generate 4.61% return on investment over 90 days.

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

Calvert Balanced Portfolio  vs.  Scharf Fund Retail

Calvert Balanced Por

Risk-Adjusted Performance

9 of 100

OK

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

Scharf Fund Retail

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Fund Retail are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Scharf Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Balanced and Scharf Fund

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

The idea behind Calvert Balanced Portfolio and Scharf Fund Retail 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.