Correlation Between Calvert International and Calvert Bond
Can any of the company-specific risk be diversified away by investing in both Calvert International and Calvert Bond 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 International and Calvert Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert International Equity and Calvert Bond Portfolio, you can compare the effects of market volatilities on Calvert International and Calvert Bond 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 International with a short position of Calvert Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert International and Calvert Bond.
Diversification Opportunities for Calvert International and Calvert Bond
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Calvert is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calvert International Equity and Calvert Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Bond Portfolio and Calvert International 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 International Equity are associated (or correlated) with Calvert Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Bond Portfolio has no effect on the direction of Calvert International i.e., Calvert International and Calvert Bond go up and down completely randomly.
Pair Corralation between Calvert International and Calvert Bond
Assuming the 90 days horizon Calvert International Equity is expected to generate 2.67 times more return on investment than Calvert Bond. However, Calvert International is 2.67 times more volatile than Calvert Bond Portfolio. It trades about 0.21 of its potential returns per unit of risk. Calvert Bond Portfolio is currently generating about 0.09 per unit of risk. If you would invest 2,271 in Calvert International Equity on April 15, 2025 and sell it today you would earn a total of 239.00 from holding Calvert International Equity or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert International Equity vs. Calvert Bond Portfolio
Performance |
| Timeline |
| Calvert International |
| Calvert Bond Portfolio |
Calvert International and Calvert Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert International and Calvert Bond
The main advantage of trading using opposite Calvert International and Calvert Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert International position performs unexpectedly, Calvert Bond 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 Bond will offset losses from the drop in Calvert Bond's long position.The idea behind Calvert International Equity and Calvert Bond Portfolio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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