Correlation Between Madison Diversified and Calvert International
Can any of the company-specific risk be diversified away by investing in both Madison Diversified and Calvert International 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 Madison Diversified and Calvert International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison Diversified Income and Calvert International Equity, you can compare the effects of market volatilities on Madison Diversified and Calvert International 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 Madison Diversified with a short position of Calvert International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Diversified and Calvert International.
Diversification Opportunities for Madison Diversified and Calvert International
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Madison and Calvert is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Madison Diversified Income and Calvert International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert International and Madison Diversified 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 Madison Diversified Income are associated (or correlated) with Calvert International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert International has no effect on the direction of Madison Diversified i.e., Madison Diversified and Calvert International go up and down completely randomly.
Pair Corralation between Madison Diversified and Calvert International
Assuming the 90 days horizon Madison Diversified is expected to generate 1.91 times less return on investment than Calvert International. But when comparing it to its historical volatility, Madison Diversified Income is 2.02 times less risky than Calvert International. It trades about 0.04 of its potential returns per unit of risk. Calvert International Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,194 in Calvert International Equity on October 26, 2024 and sell it today you would earn a total of 322.00 from holding Calvert International Equity or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madison Diversified Income vs. Calvert International Equity
Performance |
| Timeline |
| Madison Diversified |
| Calvert International |
Madison Diversified and Calvert International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Diversified and Calvert International
The main advantage of trading using opposite Madison Diversified and Calvert International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Diversified position performs unexpectedly, Calvert International 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 International will offset losses from the drop in Calvert International's long position.| Madison Diversified vs. Siit Emerging Markets | Madison Diversified vs. Western Asset Diversified | Madison Diversified vs. Inverse Emerging Markets | Madison Diversified vs. Fidelity New Markets |
| Calvert International vs. World Energy Fund | Calvert International vs. Fidelity Advisor Energy | Calvert International vs. Allianzgi Global Natural | Calvert International vs. Virtus Select Mlp |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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