Correlation Between World Energy and Calvert Global
Can any of the company-specific risk be diversified away by investing in both World Energy 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 World Energy and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Calvert Global Energy, you can compare the effects of market volatilities on World Energy 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 World Energy with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Calvert Global.
Diversification Opportunities for World Energy and Calvert Global
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between World and Calvert is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund 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 World Energy 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 World Energy Fund 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 World Energy i.e., World Energy and Calvert Global go up and down completely randomly.
Pair Corralation between World Energy and Calvert Global
Assuming the 90 days horizon World Energy Fund is expected to generate 1.21 times more return on investment than Calvert Global. However, World Energy is 1.21 times more volatile than Calvert Global Energy. It trades about 0.36 of its potential returns per unit of risk. Calvert Global Energy is currently generating about -0.16 per unit of risk. If you would invest 1,418 in World Energy Fund on August 24, 2024 and sell it today you would earn a total of 138.00 from holding World Energy Fund or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
World Energy Fund vs. Calvert Global Energy
Performance |
| Timeline |
| World Energy |
| Calvert Global Energy |
World Energy and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Calvert Global
The main advantage of trading using opposite World Energy and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy 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.| World Energy vs. Vanguard Energy Fund | World Energy vs. Vanguard Energy Index | World Energy vs. Fidelity Select Portfolios | World Energy vs. Fidelity Advisor Energy |
| Calvert Global vs. Real Estate Fund | Calvert Global vs. Tiaa Cref Real Estate | Calvert Global vs. Dunham Real Estate | Calvert Global vs. Dunham Real Estate |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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