Correlation Between American Funds and Calvert Global
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Smallcap and Calvert Global Energy, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Global.
Diversification Opportunities for American Funds and Calvert Global
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Calvert is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Smallcap 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 American Funds 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 American Funds Smallcap 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 American Funds i.e., American Funds and Calvert Global go up and down completely randomly.
Pair Corralation between American Funds and Calvert Global
Assuming the 90 days horizon American Funds Smallcap is expected to generate 0.9 times more return on investment than Calvert Global. However, American Funds Smallcap is 1.11 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 6,931 in American Funds Smallcap on September 4, 2024 and sell it today you would earn a total of 283.00 from holding American Funds Smallcap or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Funds Smallcap vs. Calvert Global Energy
Performance |
| Timeline |
| American Funds Smallcap |
| Calvert Global Energy |
American Funds and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert Global
The main advantage of trading using opposite American Funds and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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