Correlation Between Firsthand Alternative and Calvert Global
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Calvert Global 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 Firsthand Alternative and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Calvert Global Energy, you can compare the effects of market volatilities on Firsthand Alternative and Calvert Global 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 Firsthand Alternative with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Calvert Global.
Diversification Opportunities for Firsthand Alternative and Calvert Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Firsthand and Calvert is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Calvert Global go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Calvert Global
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Calvert Global. In addition to that, Firsthand Alternative is 1.92 times more volatile than Calvert Global Energy. It trades about -0.11 of its total potential returns per unit of risk. Calvert Global Energy is currently generating about -0.09 per unit of volatility. If you would invest 1,069 in Calvert Global Energy on November 5, 2024 and sell it today you would lose (21.00) from holding Calvert Global Energy or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Calvert Global Energy
Performance |
| Timeline |
| Firsthand Alternative |
| Calvert Global Energy |
Firsthand Alternative and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Calvert Global
The main advantage of trading using opposite Firsthand Alternative and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Calvert Global 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 Global will offset losses from the drop in Calvert Global's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Calvert Global vs. Voya Solution Conservative | Calvert Global vs. Tax Free Conservative Income | Calvert Global vs. Federated Hermes Conservative | Calvert Global vs. Global Diversified Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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