Correlation Between Calvert Global and Wilmington Broad

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Can any of the company-specific risk be diversified away by investing in both Calvert Global and Wilmington Broad 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 Wilmington Broad 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 Wilmington Broad Market, you can compare the effects of market volatilities on Calvert Global and Wilmington Broad 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 Wilmington Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and Wilmington Broad.

Diversification Opportunities for Calvert Global and Wilmington Broad

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Calvert and Wilmington is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Wilmington Broad Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Broad Market 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 Wilmington Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Broad Market has no effect on the direction of Calvert Global i.e., Calvert Global and Wilmington Broad go up and down completely randomly.

Pair Corralation between Calvert Global and Wilmington Broad

Assuming the 90 days horizon Calvert Global Energy is expected to under-perform the Wilmington Broad. In addition to that, Calvert Global is 2.67 times more volatile than Wilmington Broad Market. It trades about -0.02 of its total potential returns per unit of risk. Wilmington Broad Market is currently generating about 0.11 per unit of volatility. If you would invest  886.00  in Wilmington Broad Market on September 1, 2024 and sell it today you would earn a total of  8.00  from holding Wilmington Broad Market or generate 0.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Calvert Global Energy  vs.  Wilmington Broad Market

 Performance 
       Timeline  
Calvert Global Energy 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Calvert Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Wilmington Broad Market 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Wilmington Broad Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Wilmington Broad is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Global and Wilmington Broad Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Calvert Global and Wilmington Broad

The main advantage of trading using opposite Calvert Global and Wilmington Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, Wilmington Broad 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 Wilmington Broad will offset losses from the drop in Wilmington Broad's long position.
The idea behind Calvert Global Energy and Wilmington Broad Market pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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