Correlation Between Calvert Developed and Pace International
Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Pace 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 Calvert Developed and Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Calvert Developed and Pace 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 Calvert Developed with a short position of Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Pace International.
Diversification Opportunities for Calvert Developed and Pace International
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Calvert and Pace is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Calvert Developed i.e., Calvert Developed and Pace International go up and down completely randomly.
Pair Corralation between Calvert Developed and Pace International
Assuming the 90 days horizon Calvert Developed is expected to generate 1.16 times less return on investment than Pace International. In addition to that, Calvert Developed is 1.01 times more volatile than Pace International Emerging. It trades about 0.33 of its total potential returns per unit of risk. Pace International Emerging is currently generating about 0.38 per unit of volatility. If you would invest 1,286 in Pace International Emerging on April 14, 2025 and sell it today you would earn a total of 228.00 from holding Pace International Emerging or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Developed Market vs. Pace International Emerging
Performance |
| Timeline |
| Calvert Developed Market |
| Pace International |
Calvert Developed and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Developed and Pace International
The main advantage of trading using opposite Calvert Developed and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Pace 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 Pace International will offset losses from the drop in Pace International'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 |
| Pace International vs. Evaluator Moderate Rms | Pace International vs. Retirement Living Through | Pace International vs. Multimanager Lifestyle Moderate | Pace International vs. Deutsche Multi Asset Moderate |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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