Correlation Between Europacific Growth and Calvert International
Can any of the company-specific risk be diversified away by investing in both Europacific Growth 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 Europacific Growth and Calvert International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Calvert International Equity, you can compare the effects of market volatilities on Europacific Growth 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 Europacific Growth with a short position of Calvert International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Calvert International.
Diversification Opportunities for Europacific Growth and Calvert International
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Europacific and Calvert is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Calvert International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert International and Europacific Growth 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 Europacific Growth Fund 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 Europacific Growth i.e., Europacific Growth and Calvert International go up and down completely randomly.
Pair Corralation between Europacific Growth and Calvert International
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.87 times more return on investment than Calvert International. However, Europacific Growth Fund is 1.15 times less risky than Calvert International. It trades about 0.0 of its potential returns per unit of risk. Calvert International Equity is currently generating about -0.07 per unit of risk. If you would invest 5,829 in Europacific Growth Fund on September 2, 2024 and sell it today you would lose (5.00) from holding Europacific Growth Fund or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Calvert International Equity
Performance |
| Timeline |
| Europacific Growth |
| Calvert International |
Europacific Growth and Calvert International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Calvert International
The main advantage of trading using opposite Europacific Growth and Calvert International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth 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.| Europacific Growth vs. Vanguard Institutional Index | Europacific Growth vs. Vanguard Mid Cap Index | Europacific Growth vs. Washington Mutual Investors | Europacific Growth vs. Vanguard Small Cap Index |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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