Correlation Between Calvert Developed and Vanguard Lifestrategy
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Vanguard Lifestrategy 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 Vanguard Lifestrategy 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 Vanguard Lifestrategy Growth, you can compare the effects of market volatilities on Calvert Developed and Vanguard Lifestrategy 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 Vanguard Lifestrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Vanguard Lifestrategy.
Diversification Opportunities for Calvert Developed and Vanguard Lifestrategy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and Vanguard is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Vanguard Lifestrategy Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Lifestrategy 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 Vanguard Lifestrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Lifestrategy has no effect on the direction of Calvert Developed i.e., Calvert Developed and Vanguard Lifestrategy go up and down completely randomly.
Pair Corralation between Calvert Developed and Vanguard Lifestrategy
Assuming the 90 days horizon Calvert Developed is expected to generate 1.16 times less return on investment than Vanguard Lifestrategy. In addition to that, Calvert Developed is 1.3 times more volatile than Vanguard Lifestrategy Growth. It trades about 0.07 of its total potential returns per unit of risk. Vanguard Lifestrategy Growth is currently generating about 0.1 per unit of volatility. If you would invest 3,487 in Vanguard Lifestrategy Growth on September 14, 2024 and sell it today you would earn a total of 1,285 from holding Vanguard Lifestrategy Growth or generate 36.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. Vanguard Lifestrategy Growth
Performance |
| Timeline |
| Calvert Developed Market |
| Vanguard Lifestrategy |
Calvert Developed and Vanguard Lifestrategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Vanguard Lifestrategy
The main advantage of trading using opposite Calvert Developed and Vanguard Lifestrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Vanguard Lifestrategy 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 Vanguard Lifestrategy will offset losses from the drop in Vanguard Lifestrategy'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 |
| Vanguard Lifestrategy vs. Western Asset Diversified | Vanguard Lifestrategy vs. Ep Emerging Markets | Vanguard Lifestrategy vs. Siit Emerging Markets | Vanguard Lifestrategy vs. Calvert Developed Market |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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