Correlation Between Calvert Developed and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and The Arbitrage 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 Calvert Developed and The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Developed Market and The Arbitrage Credit, you can compare the effects of market volatilities on Calvert Developed and The Arbitrage 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 Calvert Developed with a short position of The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and The Arbitrage.
Diversification Opportunities for Calvert Developed and The Arbitrage
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and The is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and The Arbitrage Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Credit and Calvert Developed 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 Calvert Developed Market are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Credit has no effect on the direction of Calvert Developed i.e., Calvert Developed and The Arbitrage go up and down completely randomly.
Pair Corralation between Calvert Developed and The Arbitrage
Assuming the 90 days horizon Calvert Developed Market is expected to generate 10.18 times more return on investment than The Arbitrage. However, Calvert Developed is 10.18 times more volatile than The Arbitrage Credit. It trades about 0.11 of its potential returns per unit of risk. The Arbitrage Credit is currently generating about 0.15 per unit of risk. If you would invest 3,431 in Calvert Developed Market on June 1, 2025 and sell it today you would earn a total of 179.00 from holding Calvert Developed Market or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. The Arbitrage Credit
Performance |
| Timeline |
| Calvert Developed Market |
| Arbitrage Credit |
Calvert Developed and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and The Arbitrage
The main advantage of trading using opposite Calvert Developed and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Mid Cap | Calvert Developed vs. Calvert Short Duration |
| The Arbitrage vs. Extended Market Index | The Arbitrage vs. Doubleline Emerging Markets | The Arbitrage vs. Saat Market Growth | The Arbitrage vs. Johcm Emerging Markets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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