Correlation Between Calvert Emerging and Harbor Diversified
Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Harbor Diversified 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 Emerging and Harbor Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Emerging Markets and Harbor Diversified International, you can compare the effects of market volatilities on Calvert Emerging and Harbor Diversified 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 Emerging with a short position of Harbor Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Harbor Diversified.
Diversification Opportunities for Calvert Emerging and Harbor Diversified
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and HARBOR is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Harbor Diversified Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Diversified and Calvert Emerging 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 Emerging Markets are associated (or correlated) with Harbor Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Diversified has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Harbor Diversified go up and down completely randomly.
Pair Corralation between Calvert Emerging and Harbor Diversified
Assuming the 90 days horizon Calvert Emerging Markets is expected to generate 0.83 times more return on investment than Harbor Diversified. However, Calvert Emerging Markets is 1.21 times less risky than Harbor Diversified. It trades about 0.04 of its potential returns per unit of risk. Harbor Diversified International is currently generating about 0.02 per unit of risk. If you would invest 1,156 in Calvert Emerging Markets on September 4, 2024 and sell it today you would earn a total of 6.00 from holding Calvert Emerging Markets or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Calvert Emerging Markets vs. Harbor Diversified Internation
Performance |
| Timeline |
| Calvert Emerging Markets |
| Harbor Diversified |
Calvert Emerging and Harbor Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Emerging and Harbor Diversified
The main advantage of trading using opposite Calvert Emerging and Harbor Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Harbor Diversified 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 Harbor Diversified will offset losses from the drop in Harbor Diversified's long position.| Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Calvert Short Duration | Calvert Emerging vs. Calvert International Responsible |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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