Correlation Between Capital World and Calvert Global
Can any of the company-specific risk be diversified away by investing in both Capital 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 Capital 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 Capital World Growth and Calvert Global Energy, you can compare the effects of market volatilities on Capital 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 Capital World with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Calvert Global.
Diversification Opportunities for Capital World and Calvert Global
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Calvert is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Growth 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 Capital 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 Capital World Growth 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 Capital World i.e., Capital World and Calvert Global go up and down completely randomly.
Pair Corralation between Capital World and Calvert Global
Assuming the 90 days horizon Capital World Growth is expected to generate 0.66 times more return on investment than Calvert Global. However, Capital World Growth is 1.51 times less risky than Calvert Global. It trades about -0.04 of its potential returns per unit of risk. Calvert Global Energy is currently generating about -0.14 per unit of risk. If you would invest 6,771 in Capital World Growth on August 28, 2024 and sell it today you would lose (41.00) from holding Capital World Growth or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Growth vs. Calvert Global Energy
Performance |
| Timeline |
| Capital World Growth |
| Calvert Global Energy |
Capital World and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Calvert Global
The main advantage of trading using opposite Capital World and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital 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.| Capital World vs. Income Fund Of | Capital World vs. New World Fund | Capital World vs. American Mutual Fund | Capital World vs. American Mutual Fund |
| Calvert Global vs. Tax Managed Large Cap | Calvert Global vs. Aqr Large Cap | Calvert Global vs. Gmo Equity Allocation | Calvert Global vs. Enhanced Large Pany |
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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