Correlation Between Calvert Emerging and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Vanguard Emerging 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 Vanguard Emerging 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Calvert Emerging and Vanguard Emerging 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Vanguard Emerging.
Diversification Opportunities for Calvert Emerging and Vanguard Emerging
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Calvert and Vanguard is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Calvert Emerging and Vanguard Emerging
Assuming the 90 days horizon Calvert Emerging is expected to generate 1.86 times less return on investment than Vanguard Emerging. But when comparing it to its historical volatility, Calvert Emerging Markets is 1.06 times less risky than Vanguard Emerging. It trades about 0.04 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,406 in Vanguard Emerging Markets on September 1, 2024 and sell it today you would earn a total of 365.00 from holding Vanguard Emerging Markets or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Calvert Emerging Markets vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Calvert Emerging Markets |
| Vanguard Emerging Markets |
Calvert Emerging and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Emerging and Vanguard Emerging
The main advantage of trading using opposite Calvert Emerging and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Vanguard Emerging 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 Emerging will offset losses from the drop in Vanguard Emerging'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 |
| Vanguard Emerging vs. Vanguard Developed Markets | Vanguard Emerging vs. Vanguard Reit Index | Vanguard Emerging vs. Vanguard Small Cap Index | Vanguard Emerging vs. Vanguard European Stock |
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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