Correlation Between Calvert Emerging and Calvert Aggressive
Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Calvert Aggressive 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 Calvert Aggressive 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 Calvert Aggressive Allocation, you can compare the effects of market volatilities on Calvert Emerging and Calvert Aggressive 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 Calvert Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Calvert Aggressive.
Diversification Opportunities for Calvert Emerging and Calvert Aggressive
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Calvert is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive 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 Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Calvert Aggressive go up and down completely randomly.
Pair Corralation between Calvert Emerging and Calvert Aggressive
Assuming the 90 days horizon Calvert Emerging Markets is expected to under-perform the Calvert Aggressive. In addition to that, Calvert Emerging is 1.52 times more volatile than Calvert Aggressive Allocation. It trades about -0.25 of its total potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.13 per unit of volatility. If you would invest 2,249 in Calvert Aggressive Allocation on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Calvert Aggressive Allocation or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Emerging Markets vs. Calvert Aggressive Allocation
Performance |
| Timeline |
| Calvert Emerging Markets |
| Calvert Aggressive |
Calvert Emerging and Calvert Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Emerging and Calvert Aggressive
The main advantage of trading using opposite Calvert Emerging and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Calvert Aggressive 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 Aggressive will offset losses from the drop in Calvert Aggressive's long position.| Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Calvert Short Duration | Calvert Emerging vs. Calvert International Responsible |
| Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Short Duration | Calvert Aggressive vs. Calvert International Responsible |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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