Correlation Between Moderate Balanced and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Moderate Balanced 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 Moderate Balanced and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Balanced Allocation and Calvert Emerging Markets, you can compare the effects of market volatilities on Moderate Balanced 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 Moderate Balanced with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Balanced and Calvert Emerging.
Diversification Opportunities for Moderate Balanced and Calvert Emerging
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Moderate and Calvert is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Balanced Allocation 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 Moderate Balanced 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 Moderate Balanced Allocation 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 Moderate Balanced i.e., Moderate Balanced and Calvert Emerging go up and down completely randomly.
Pair Corralation between Moderate Balanced and Calvert Emerging
Assuming the 90 days horizon Moderate Balanced is expected to generate 1.89 times less return on investment than Calvert Emerging. But when comparing it to its historical volatility, Moderate Balanced Allocation is 2.2 times less risky than Calvert Emerging. It trades about 0.35 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,819 in Calvert Emerging Markets on April 2, 2025 and sell it today you would earn a total of 97.00 from holding Calvert Emerging Markets or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Moderate Balanced Allocation vs. Calvert Emerging Markets
Performance |
| Timeline |
| Moderate Balanced |
| Calvert Emerging Markets |
Moderate Balanced and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Balanced and Calvert Emerging
The main advantage of trading using opposite Moderate Balanced and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Balanced 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.| Moderate Balanced vs. Sprott Gold Equity | Moderate Balanced vs. Fidelity Advisor Gold | Moderate Balanced vs. Great West Goldman Sachs | Moderate Balanced vs. International Investors Gold |
| Calvert Emerging vs. Gmo Emerging Markets | Calvert Emerging vs. Investec Emerging Markets | Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Siit 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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