Correlation Between Calvert International and Walden Midcap
Can any of the company-specific risk be diversified away by investing in both Calvert International and Walden Midcap 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 International and Walden Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert International Equity and Walden Midcap Fund, you can compare the effects of market volatilities on Calvert International and Walden Midcap 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 International with a short position of Walden Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert International and Walden Midcap.
Diversification Opportunities for Calvert International and Walden Midcap
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Calvert and Walden is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calvert International Equity and Walden Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Midcap and Calvert International 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 International Equity are associated (or correlated) with Walden Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Midcap has no effect on the direction of Calvert International i.e., Calvert International and Walden Midcap go up and down completely randomly.
Pair Corralation between Calvert International and Walden Midcap
Assuming the 90 days horizon Calvert International is expected to generate 1.56 times less return on investment than Walden Midcap. But when comparing it to its historical volatility, Calvert International Equity is 1.01 times less risky than Walden Midcap. It trades about 0.04 of its potential returns per unit of risk. Walden Midcap Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,011 in Walden Midcap Fund on August 28, 2024 and sell it today you would earn a total of 513.00 from holding Walden Midcap Fund or generate 25.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert International Equity vs. Walden Midcap Fund
Performance |
| Timeline |
| Calvert International |
| Walden Midcap |
Calvert International and Walden Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert International and Walden Midcap
The main advantage of trading using opposite Calvert International and Walden Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert International position performs unexpectedly, Walden Midcap 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 Walden Midcap will offset losses from the drop in Walden Midcap's long position.| Calvert International vs. Calvert Equity Portfolio | Calvert International vs. Calvert Small Cap | Calvert International vs. Calvert Bond Portfolio | Calvert International vs. Calvert Large Cap |
| Walden Midcap vs. Calvert Small Cap | Walden Midcap vs. Calvert International Equity | Walden Midcap vs. Champlain Mid Cap | Walden Midcap vs. Aquagold International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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