Correlation Between Calvert Emerging and Virginia Bond
Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Virginia Bond 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 Virginia Bond 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 Virginia Bond Fund, you can compare the effects of market volatilities on Calvert Emerging and Virginia Bond 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 Virginia Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Virginia Bond.
Diversification Opportunities for Calvert Emerging and Virginia Bond
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Calvert and Virginia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Virginia Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia Bond 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 Virginia Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia Bond has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Virginia Bond go up and down completely randomly.
Pair Corralation between Calvert Emerging and Virginia Bond
Assuming the 90 days horizon Calvert Emerging Markets is expected to under-perform the Virginia Bond. In addition to that, Calvert Emerging is 1.95 times more volatile than Virginia Bond Fund. It trades about -0.17 of its total potential returns per unit of risk. Virginia Bond Fund is currently generating about 0.28 per unit of volatility. If you would invest 1,045 in Virginia Bond Fund on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Virginia Bond Fund or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Emerging Markets vs. Virginia Bond Fund
Performance |
| Timeline |
| Calvert Emerging Markets |
| Virginia Bond |
Calvert Emerging and Virginia Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Emerging and Virginia Bond
The main advantage of trading using opposite Calvert Emerging and Virginia Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Virginia Bond 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 Virginia Bond will offset losses from the drop in Virginia Bond'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 |
| Virginia Bond vs. Goldman Sachs Clean | Virginia Bond vs. James Balanced Golden | Virginia Bond vs. Europac Gold Fund | Virginia Bond vs. International Investors Gold |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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