Correlation Between Calvert Emerging and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Calvert Emerging and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Growth Strategy.
Diversification Opportunities for Calvert Emerging and Growth Strategy
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and GROWTH is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Growth Strategy go up and down completely randomly.
Pair Corralation between Calvert Emerging and Growth Strategy
Assuming the 90 days horizon Calvert Emerging Markets is expected to under-perform the Growth Strategy. In addition to that, Calvert Emerging is 1.49 times more volatile than Growth Strategy Fund. It trades about -0.17 of its total potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.33 per unit of volatility. If you would invest 1,299 in Growth Strategy Fund on September 2, 2024 and sell it today you would earn a total of 45.00 from holding Growth Strategy Fund or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Emerging Markets vs. Growth Strategy Fund
Performance |
| Timeline |
| Calvert Emerging Markets |
| Growth Strategy |
Calvert Emerging and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Emerging and Growth Strategy
The main advantage of trading using opposite Calvert Emerging and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Growth Strategy 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 Strategy will offset losses from the drop in Growth Strategy's long position.| Calvert Emerging vs. Siit High Yield | Calvert Emerging vs. Franklin High Income | Calvert Emerging vs. Pace High Yield | Calvert Emerging vs. Metropolitan West High |
| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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