Correlation Between Calvert Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Western Asset 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 Western Asset 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 Western Asset Premier, you can compare the effects of market volatilities on Calvert Emerging and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Western Asset.
Diversification Opportunities for Calvert Emerging and Western Asset
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calvert and Western is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Western Asset Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Premier 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Premier has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Calvert Emerging and Western Asset
Assuming the 90 days horizon Calvert Emerging Markets is expected to generate 0.58 times more return on investment than Western Asset. However, Calvert Emerging Markets is 1.72 times less risky than Western Asset. It trades about 0.06 of its potential returns per unit of risk. Western Asset Premier is currently generating about 0.02 per unit of risk. If you would invest 1,005 in Calvert Emerging Markets on September 2, 2024 and sell it today you would earn a total of 185.00 from holding Calvert Emerging Markets or generate 18.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.35% |
| Values | Daily Returns |
Calvert Emerging Markets vs. Western Asset Premier
Performance |
| Timeline |
| Calvert Emerging Markets |
| Western Asset Premier |
Calvert Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Emerging and Western Asset
The main advantage of trading using opposite Calvert Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Lord Abbett Small | Western Asset vs. Palm Valley Capital | Western Asset vs. Mid Cap Value Profund | Western Asset vs. Heartland Value Plus |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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