Correlation Between Calvert Developed and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Dunham Large 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 Developed and Dunham Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Developed Market and Dunham Large Cap, you can compare the effects of market volatilities on Calvert Developed and Dunham Large 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 Developed with a short position of Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Dunham Large.
Diversification Opportunities for Calvert Developed and Dunham Large
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Dunham is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and Calvert Developed 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 Developed Market are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Calvert Developed i.e., Calvert Developed and Dunham Large go up and down completely randomly.
Pair Corralation between Calvert Developed and Dunham Large
Assuming the 90 days horizon Calvert Developed Market is expected to generate 0.68 times more return on investment than Dunham Large. However, Calvert Developed Market is 1.46 times less risky than Dunham Large. It trades about 0.01 of its potential returns per unit of risk. Dunham Large Cap is currently generating about -0.14 per unit of risk. If you would invest 2,984 in Calvert Developed Market on October 22, 2024 and sell it today you would earn a total of 8.00 from holding Calvert Developed Market or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. Dunham Large Cap
Performance |
| Timeline |
| Calvert Developed Market |
| Dunham Large Cap |
Calvert Developed and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Dunham Large
The main advantage of trading using opposite Calvert Developed and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Dunham Large 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 Dunham Large will offset losses from the drop in Dunham Large's long position.| Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Mid Cap | Calvert Developed vs. Calvert Short Duration |
| Dunham Large vs. Extended Market Index | Dunham Large vs. Legg Mason Partners | Dunham Large vs. Calvert Developed Market | Dunham Large vs. T Rowe Price |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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