Correlation Between SPDR SP and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Calvert Emerging Markets, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Calvert Emerging.
Diversification Opportunities for SPDR SP and Calvert Emerging
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Calvert is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 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 SPDR SP 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 SPDR SP 500 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 SPDR SP i.e., SPDR SP and Calvert Emerging go up and down completely randomly.
Pair Corralation between SPDR SP and Calvert Emerging
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 1.2 times more return on investment than Calvert Emerging. However, SPDR SP is 1.2 times more volatile than Calvert Emerging Markets. It trades about 0.4 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.2 per unit of risk. If you would invest 51,236 in SPDR SP 500 on April 19, 2025 and sell it today you would earn a total of 11,568 from holding SPDR SP 500 or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
SPDR SP 500 vs. Calvert Emerging Markets
Performance |
| Timeline |
| SPDR SP 500 |
| Calvert Emerging Markets |
SPDR SP and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Calvert Emerging
The main advantage of trading using opposite SPDR SP and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. Vanguard SP 500 | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights |
| Calvert Emerging vs. Ab High Income | Calvert Emerging vs. Needham Aggressive Growth | Calvert Emerging vs. Prudential High Yield | Calvert Emerging vs. Ab High Income |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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