Correlation Between Vanguard Total and Calvert International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and Calvert International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Calvert International Responsible, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of Calvert International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Calvert International.
Diversification Opportunities for Vanguard Total and Calvert International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Calvert is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Calvert International Responsi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert International and Vanguard Total 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 Total International 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 Vanguard Total i.e., Vanguard Total and Calvert International go up and down completely randomly.
Pair Corralation between Vanguard Total and Calvert International
Assuming the 90 days horizon Vanguard Total International is expected to under-perform the Calvert International. In addition to that, Vanguard Total is 1.02 times more volatile than Calvert International Responsible. It trades about -0.03 of its total potential returns per unit of risk. Calvert International Responsible is currently generating about 0.03 per unit of volatility. If you would invest 3,110 in Calvert International Responsible on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Calvert International Responsible or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Calvert International Responsi
Performance |
| Timeline |
| Vanguard Total Inter |
| Calvert International |
Vanguard Total and Calvert International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Calvert International
The main advantage of trading using opposite Vanguard Total and Calvert International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Small Cap Index |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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