Correlation Between Calvert Global and Pace International
Can any of the company-specific risk be diversified away by investing in both Calvert Global and Pace International 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 Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Calvert Global and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and Pace International.
Diversification Opportunities for Calvert Global and Pace International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Pace is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Calvert Global i.e., Calvert Global and Pace International go up and down completely randomly.
Pair Corralation between Calvert Global and Pace International
Assuming the 90 days horizon Calvert Global is expected to generate 1.26 times less return on investment than Pace International. But when comparing it to its historical volatility, Calvert Global Energy is 1.02 times less risky than Pace International. It trades about 0.08 of its potential returns per unit of risk. Pace International Emerging is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,227 in Pace International Emerging on September 4, 2024 and sell it today you would earn a total of 101.00 from holding Pace International Emerging or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Global Energy vs. Pace International Emerging
Performance |
| Timeline |
| Calvert Global Energy |
| Pace International |
Calvert Global and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Global and Pace International
The main advantage of trading using opposite Calvert Global and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International's long position.| Calvert Global vs. Ashmore Emerging Markets | Calvert Global vs. Wells Fargo Funds | Calvert Global vs. Lord Abbett Emerging | Calvert Global vs. Elfun Government Money |
| Pace International vs. Pace Smallmedium Value | Pace International vs. Pace International Equity | Pace International vs. Pace International Equity | Pace International vs. Ubs Allocation Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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