Correlation Between Calvert Developed and Oshaughnessy Market
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Oshaughnessy Market 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 Oshaughnessy Market 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 Oshaughnessy Market Leaders, you can compare the effects of market volatilities on Calvert Developed and Oshaughnessy Market 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 Oshaughnessy Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Oshaughnessy Market.
Diversification Opportunities for Calvert Developed and Oshaughnessy Market
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Calvert and Oshaughnessy is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Oshaughnessy Market Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshaughnessy Market 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 Oshaughnessy Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshaughnessy Market has no effect on the direction of Calvert Developed i.e., Calvert Developed and Oshaughnessy Market go up and down completely randomly.
Pair Corralation between Calvert Developed and Oshaughnessy Market
Assuming the 90 days horizon Calvert Developed Market is expected to generate 0.76 times more return on investment than Oshaughnessy Market. However, Calvert Developed Market is 1.31 times less risky than Oshaughnessy Market. It trades about -0.15 of its potential returns per unit of risk. Oshaughnessy Market Leaders is currently generating about -0.23 per unit of risk. If you would invest 3,042 in Calvert Developed Market on October 11, 2024 and sell it today you would lose (67.00) from holding Calvert Developed Market or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. Oshaughnessy Market Leaders
Performance |
| Timeline |
| Calvert Developed Market |
| Oshaughnessy Market |
Calvert Developed and Oshaughnessy Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Oshaughnessy Market
The main advantage of trading using opposite Calvert Developed and Oshaughnessy Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Oshaughnessy Market 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 Oshaughnessy Market will offset losses from the drop in Oshaughnessy Market'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 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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