Correlation Between Calvert Global and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Calvert Global and Growth Allocation 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 Growth Allocation 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 Growth Allocation Index, you can compare the effects of market volatilities on Calvert Global and Growth Allocation 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and Growth Allocation.
Diversification Opportunities for Calvert Global and Growth Allocation
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and Growth is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Growth Allocation Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation Index 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation Index has no effect on the direction of Calvert Global i.e., Calvert Global and Growth Allocation go up and down completely randomly.
Pair Corralation between Calvert Global and Growth Allocation
Assuming the 90 days horizon Calvert Global Energy is expected to under-perform the Growth Allocation. In addition to that, Calvert Global is 1.95 times more volatile than Growth Allocation Index. It trades about -0.03 of its total potential returns per unit of risk. Growth Allocation Index is currently generating about 0.12 per unit of volatility. If you would invest 1,100 in Growth Allocation Index on September 13, 2024 and sell it today you would earn a total of 38.00 from holding Growth Allocation Index or generate 3.45% 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. Growth Allocation Index
Performance |
| Timeline |
| Calvert Global Energy |
| Growth Allocation Index |
Calvert Global and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Global and Growth Allocation
The main advantage of trading using opposite Calvert Global and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Calvert Global vs. Ab Global Risk | Calvert Global vs. Lgm Risk Managed | Calvert Global vs. Western Asset High | Calvert Global vs. Ab Global Risk |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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