Correlation Between MSCI ACWI and Calvert Equity
Can any of the company-specific risk be diversified away by investing in both MSCI ACWI and Calvert Equity 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 MSCI ACWI and Calvert Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI ACWI exAUCONSUMER and Calvert Equity Portfolio, you can compare the effects of market volatilities on MSCI ACWI and Calvert Equity 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 MSCI ACWI with a short position of Calvert Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI ACWI and Calvert Equity.
Diversification Opportunities for MSCI ACWI and Calvert Equity
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MSCI and Calvert is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MSCI ACWI exAUCONSUMER and Calvert Equity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Equity Portfolio and MSCI ACWI 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 MSCI ACWI exAUCONSUMER are associated (or correlated) with Calvert Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Equity Portfolio has no effect on the direction of MSCI ACWI i.e., MSCI ACWI and Calvert Equity go up and down completely randomly.
Pair Corralation between MSCI ACWI and Calvert Equity
Assuming the 90 days horizon MSCI ACWI is expected to generate 2.14 times less return on investment than Calvert Equity. But when comparing it to its historical volatility, MSCI ACWI exAUCONSUMER is 2.69 times less risky than Calvert Equity. It trades about 0.19 of its potential returns per unit of risk. Calvert Equity Portfolio is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 8,438 in Calvert Equity Portfolio on August 31, 2024 and sell it today you would earn a total of 195.00 from holding Calvert Equity Portfolio or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI ACWI exAUCONSUMER vs. Calvert Equity Portfolio
Performance |
| Timeline |
| MSCI ACWI exAUCONSUMER |
| Calvert Equity Portfolio |
MSCI ACWI and Calvert Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI ACWI and Calvert Equity
The main advantage of trading using opposite MSCI ACWI and Calvert Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI ACWI position performs unexpectedly, Calvert Equity 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 Equity will offset losses from the drop in Calvert Equity's long position.| MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. TRINL |
| Calvert Equity vs. Calvert Bond Portfolio | Calvert Equity vs. Calvert International Equity | Calvert Equity vs. Calvert Capital Accumulation | Calvert Equity vs. Calvert Balanced Portfolio |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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