Correlation Between Calvert Developed and Extended Market
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Extended 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 Extended 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 Extended Market Index, you can compare the effects of market volatilities on Calvert Developed and Extended 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 Extended Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Extended Market.
Diversification Opportunities for Calvert Developed and Extended Market
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and Extended is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Extended Market Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extended Market Index 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 Extended Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extended Market Index has no effect on the direction of Calvert Developed i.e., Calvert Developed and Extended Market go up and down completely randomly.
Pair Corralation between Calvert Developed and Extended Market
Assuming the 90 days horizon Calvert Developed Market is expected to generate 0.94 times more return on investment than Extended Market. However, Calvert Developed Market is 1.06 times less risky than Extended Market. It trades about 0.33 of its potential returns per unit of risk. Extended Market Index is currently generating about 0.19 per unit of risk. If you would invest 2,932 in Calvert Developed Market on November 3, 2024 and sell it today you would earn a total of 173.00 from holding Calvert Developed Market or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. Extended Market Index
Performance |
| Timeline |
| Calvert Developed Market |
| Extended Market Index |
Calvert Developed and Extended Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Extended Market
The main advantage of trading using opposite Calvert Developed and Extended Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Extended 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 Extended Market will offset losses from the drop in Extended 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 |
| Extended Market vs. Lebenthal Lisanti Small | Extended Market vs. Oklahoma College Savings | Extended Market vs. Small Pany Growth | Extended Market vs. Sp Smallcap 600 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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