Correlation Between Nasdaq-100(r) and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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 Nasdaq-100(r) and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Calvert Emerging Markets, you can compare the effects of market volatilities on Nasdaq-100(r) 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 Nasdaq-100(r) with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Calvert Emerging.
Diversification Opportunities for Nasdaq-100(r) and Calvert Emerging
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq-100(r) and Calvert is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy 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 Nasdaq-100(r) 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 Nasdaq 100 2x Strategy 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 Nasdaq-100(r) i.e., Nasdaq-100(r) and Calvert Emerging go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Calvert Emerging
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 2.76 times more return on investment than Calvert Emerging. However, Nasdaq-100(r) is 2.76 times more volatile than Calvert Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.06 per unit of risk. If you would invest 16,173 in Nasdaq 100 2x Strategy on August 24, 2024 and sell it today you would earn a total of 25,004 from holding Nasdaq 100 2x Strategy or generate 154.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.4% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Calvert Emerging Markets
Performance |
| Timeline |
| Nasdaq 100 2x |
| Calvert Emerging Markets |
Nasdaq-100(r) and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Calvert Emerging
The main advantage of trading using opposite Nasdaq-100(r) and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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.| Nasdaq-100(r) vs. Goldman Sachs Large | Nasdaq-100(r) vs. Federated Mdt Large | Nasdaq-100(r) vs. Qs Large Cap | Nasdaq-100(r) vs. Aqr Large Cap |
| Calvert Emerging vs. Vanguard Emerging Markets | Calvert Emerging vs. Vanguard Emerging Markets | Calvert Emerging vs. Vanguard Emerging Markets | Calvert Emerging vs. American Funds New |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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