Correlation Between Calvert Large and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Calvert Large and Emerging Markets 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 Large and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Large Cap and Emerging Markets Equity, you can compare the effects of market volatilities on Calvert Large and Emerging Markets 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 Large with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Large and Emerging Markets.
Diversification Opportunities for Calvert Large and Emerging Markets
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calvert and Emerging is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity and Calvert Large 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 Large Cap are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of Calvert Large i.e., Calvert Large and Emerging Markets go up and down completely randomly.
Pair Corralation between Calvert Large and Emerging Markets
Assuming the 90 days horizon Calvert Large Cap is expected to under-perform the Emerging Markets. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Large Cap is 5.14 times less risky than Emerging Markets. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Emerging Markets Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Emerging Markets Equity on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Emerging Markets Equity or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Calvert Large Cap vs. Emerging Markets Equity
Performance |
| Timeline |
| Calvert Large Cap |
| Emerging Markets Equity |
Calvert Large and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Large and Emerging Markets
The main advantage of trading using opposite Calvert Large and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Large position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Calvert Large vs. Blackstone Secured Lending | Calvert Large vs. Davis Financial Fund | Calvert Large vs. Financial Industries Fund | Calvert Large vs. Angel Oak Financial |
| Emerging Markets vs. Blackrock Global Longshort | Emerging Markets vs. Cmg Ultra Short | Emerging Markets vs. Angel Oak Ultrashort | Emerging Markets vs. Alpine Ultra Short |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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