Correlation Between Vanguard Emerging and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging 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 Vanguard Emerging and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Calvert Emerging Markets, you can compare the effects of market volatilities on Vanguard Emerging 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 Vanguard Emerging with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Calvert Emerging.
Diversification Opportunities for Vanguard Emerging and Calvert Emerging
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and Calvert is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets 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 Vanguard Emerging 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 Vanguard Emerging Markets 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 Vanguard Emerging i.e., Vanguard Emerging and Calvert Emerging go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Calvert Emerging
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 1.14 times more return on investment than Calvert Emerging. However, Vanguard Emerging is 1.14 times more volatile than Calvert Emerging Markets. It trades about -0.11 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 2,938 in Vanguard Emerging Markets on September 1, 2024 and sell it today you would lose (57.00) from holding Vanguard Emerging Markets or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Calvert Emerging Markets
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Calvert Emerging Markets |
Vanguard Emerging and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Calvert Emerging
The main advantage of trading using opposite Vanguard Emerging and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging 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.| Vanguard Emerging vs. Vanguard Materials Index | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Global Minimum |
| Calvert Emerging vs. Guidepath Managed Futures | Calvert Emerging vs. Fidelity Advisor 529 | Calvert Emerging vs. Ab Bond Inflation | Calvert Emerging vs. Cref Inflation Linked Bond |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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