Correlation Between Vanguard Global and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Global 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 Global 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 Global Credit and Calvert Emerging Markets, you can compare the effects of market volatilities on Vanguard Global 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 Global with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Calvert Emerging.
Diversification Opportunities for Vanguard Global and Calvert Emerging
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VANGUARD and Calvert is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Credit 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 Global 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 Global Credit 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 Global i.e., Vanguard Global and Calvert Emerging go up and down completely randomly.
Pair Corralation between Vanguard Global and Calvert Emerging
Assuming the 90 days horizon Vanguard Global is expected to generate 2.21 times less return on investment than Calvert Emerging. But when comparing it to its historical volatility, Vanguard Global Credit is 3.64 times less risky than Calvert Emerging. It trades about 0.07 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,625 in Calvert Emerging Markets on August 25, 2024 and sell it today you would earn a total of 138.00 from holding Calvert Emerging Markets or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Credit vs. Calvert Emerging Markets
Performance |
| Timeline |
| Vanguard Global Credit |
| Calvert Emerging Markets |
Vanguard Global and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Calvert Emerging
The main advantage of trading using opposite Vanguard Global and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global 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 Global vs. Vanguard Materials Index | Vanguard Global vs. Vanguard Limited Term Tax Exempt | Vanguard Global vs. Vanguard Limited Term Tax Exempt | Vanguard Global vs. Vanguard Global Minimum |
| Calvert Emerging vs. Multisector Bond Sma | Calvert Emerging vs. Ultra Short Term Fixed | Calvert Emerging vs. Gmo Emerging Country | Calvert Emerging vs. Vanguard Global Credit |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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