Correlation Between Smallcap World and Calvert Global
Can any of the company-specific risk be diversified away by investing in both Smallcap World and Calvert Global 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 Smallcap World and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap World Fund and Calvert Global Energy, you can compare the effects of market volatilities on Smallcap World and Calvert Global 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 Smallcap World with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap World and Calvert Global.
Diversification Opportunities for Smallcap World and Calvert Global
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Smallcap and Calvert is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Smallcap World 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 Smallcap World Fund are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Smallcap World i.e., Smallcap World and Calvert Global go up and down completely randomly.
Pair Corralation between Smallcap World and Calvert Global
Assuming the 90 days horizon Smallcap World Fund is expected to generate 0.88 times more return on investment than Calvert Global. However, Smallcap World Fund is 1.14 times less risky than Calvert Global. It trades about 0.23 of its potential returns per unit of risk. Calvert Global Energy is currently generating about -0.06 per unit of risk. If you would invest 6,452 in Smallcap World Fund on September 4, 2024 and sell it today you would earn a total of 273.00 from holding Smallcap World Fund or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap World Fund vs. Calvert Global Energy
Performance |
| Timeline |
| Smallcap World |
| Calvert Global Energy |
Smallcap World and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap World and Calvert Global
The main advantage of trading using opposite Smallcap World and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap World position performs unexpectedly, Calvert Global 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 Calvert Global will offset losses from the drop in Calvert Global's long position.| Smallcap World vs. Income Fund Of | Smallcap World vs. New World Fund | Smallcap World vs. American Mutual Fund | Smallcap World vs. American Mutual Fund |
| Calvert Global vs. Ashmore Emerging Markets | Calvert Global vs. Wells Fargo Funds | Calvert Global vs. Lord Abbett Emerging | Calvert Global vs. Elfun Government Money |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |