Correlation Between Calvert Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Calvert Global and Dow Jones 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 Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Global Energy and Dow Jones Industrial, you can compare the effects of market volatilities on Calvert Global and Dow Jones 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 Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and Dow Jones.
Diversification Opportunities for Calvert Global and Dow Jones
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and Dow is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Calvert Global 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 Global Energy are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Calvert Global i.e., Calvert Global and Dow Jones go up and down completely randomly.
Pair Corralation between Calvert Global and Dow Jones
Assuming the 90 days horizon Calvert Global Energy is expected to under-perform the Dow Jones. In addition to that, Calvert Global Energy is as risky as Dow Jones. It trades about -0.14 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Global Energy vs. Dow Jones Industrial
Performance |
| Timeline |
Calvert Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Calvert Global Energy
Pair trading matchups for Calvert Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Calvert Global and Dow Jones
The main advantage of trading using opposite Calvert Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Calvert Global vs. Tax Managed Large Cap | Calvert Global vs. Aqr Large Cap | Calvert Global vs. Gmo Equity Allocation | Calvert Global vs. Enhanced Large Pany |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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