Correlation Between American Funds and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Conservative and Calvert Emerging Markets, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Calvert Emerging.
Diversification Opportunities for American Funds and Calvert Emerging
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Calvert is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Conservative 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 American Funds 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 American Funds Conservative 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 American Funds i.e., American Funds and Calvert Emerging go up and down completely randomly.
Pair Corralation between American Funds and Calvert Emerging
Assuming the 90 days horizon American Funds is expected to generate 3.32 times less return on investment than Calvert Emerging. But when comparing it to its historical volatility, American Funds Conservative is 1.53 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 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,083 in Calvert Emerging Markets on March 26, 2025 and sell it today you would earn a total of 110.00 from holding Calvert Emerging Markets or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Conservative vs. Calvert Emerging Markets
Performance |
| Timeline |
| American Funds Conse |
| Calvert Emerging Markets |
American Funds and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Calvert Emerging
The main advantage of trading using opposite American Funds and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Income Fund Of | American Funds vs. American Mutual Fund | American Funds vs. Income Fund Of | American Funds vs. New Economy Fund |
| Calvert Emerging vs. Delaware Limited Term Diversified | Calvert Emerging vs. Issachar Fund Class | Calvert Emerging vs. Principal Lifetime Hybrid | Calvert Emerging vs. Growth Fund Of |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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