Correlation Between Schwab Small-cap and Calvert International
Can any of the company-specific risk be diversified away by investing in both Schwab Small-cap 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 Schwab Small-cap and Calvert International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab Small Cap Index and Calvert International Equity, you can compare the effects of market volatilities on Schwab Small-cap 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 Schwab Small-cap with a short position of Calvert International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab Small-cap and Calvert International.
Diversification Opportunities for Schwab Small-cap and Calvert International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schwab and Calvert is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Small Cap Index and Calvert International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert International and Schwab Small-cap 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 Schwab Small Cap Index 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 Schwab Small-cap i.e., Schwab Small-cap and Calvert International go up and down completely randomly.
Pair Corralation between Schwab Small-cap and Calvert International
Assuming the 90 days horizon Schwab Small Cap Index is expected to under-perform the Calvert International. In addition to that, Schwab Small-cap is 1.85 times more volatile than Calvert International Equity. It trades about -0.25 of its total potential returns per unit of risk. Calvert International Equity is currently generating about -0.24 per unit of volatility. If you would invest 2,491 in Calvert International Equity on October 12, 2024 and sell it today you would lose (81.00) from holding Calvert International Equity or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schwab Small Cap Index vs. Calvert International Equity
Performance |
| Timeline |
| Schwab Small Cap |
| Calvert International |
Schwab Small-cap and Calvert International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwab Small-cap and Calvert International
The main advantage of trading using opposite Schwab Small-cap and Calvert International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab Small-cap 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.| Schwab Small-cap vs. Schwab International Index | Schwab Small-cap vs. Schwab Total Stock | Schwab Small-cap vs. Schwab Sp 500 | Schwab Small-cap vs. Schwab 1000 Index |
| Calvert International vs. Schwab Small Cap Index | Calvert International vs. T Rowe Price | Calvert International vs. Madison Diversified Income | Calvert International vs. Allianzgi Diversified Income |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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