Correlation Between American Funds and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds and Calvert Emerging 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 Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Retirement and Calvert Emerging Markets, you can compare the effects of market volatilities on American Funds and Calvert Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Emerging.
Diversification Opportunities for American Funds and Calvert Emerging
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Calvert is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Retirement and Calvert Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Emerging Markets 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 Retirement are associated (or correlated) with Calvert Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Emerging Markets has no effect on the direction of American Funds i.e., American Funds and Calvert Emerging go up and down completely randomly.
Pair Corralation between American Funds and Calvert Emerging
Assuming the 90 days horizon American Funds Retirement is expected to generate 0.44 times more return on investment than Calvert Emerging. However, American Funds Retirement is 2.25 times less risky than Calvert Emerging. It trades about 0.09 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 1,087 in American Funds Retirement on November 27, 2024 and sell it today you would earn a total of 198.00 from holding American Funds Retirement or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Retirement vs. Calvert Emerging Markets
Performance |
| Timeline |
| American Funds Retirement |
| Calvert Emerging Markets |
American Funds and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert Emerging
The main advantage of trading using opposite American Funds and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Calvert Emerging 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 Emerging will offset losses from the drop in Calvert Emerging's long position.| American Funds vs. Wisdomtree Siegel Global | American Funds vs. Alliancebernstein Global Highome | American Funds vs. T Rowe Price | American Funds vs. Doubleline Global Bond |
| Calvert Emerging vs. T Rowe Price | Calvert Emerging vs. T Rowe Price | Calvert Emerging vs. Doubleline Emerging Markets | Calvert Emerging vs. T Rowe Price |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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