Correlation Between Vanguard Small-cap and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap 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 Vanguard Small-cap and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Calvert Emerging Markets, you can compare the effects of market volatilities on Vanguard Small-cap 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 Vanguard Small-cap with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Calvert Emerging.
Diversification Opportunities for Vanguard Small-cap and Calvert Emerging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Calvert is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value 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 Vanguard Small-cap 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 Vanguard Small Cap Value 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 Vanguard Small-cap i.e., Vanguard Small-cap and Calvert Emerging go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Calvert Emerging
Assuming the 90 days horizon Vanguard Small-cap is expected to generate 1.07 times less return on investment than Calvert Emerging. In addition to that, Vanguard Small-cap is 1.76 times more volatile than Calvert Emerging Markets. It trades about 0.15 of its total potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.28 per unit of volatility. If you would invest 1,350 in Calvert Emerging Markets on May 28, 2025 and sell it today you would earn a total of 97.00 from holding Calvert Emerging Markets or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Calvert Emerging Markets
Performance |
| Timeline |
| Vanguard Small Cap |
| Calvert Emerging Markets |
Vanguard Small-cap and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Calvert Emerging
The main advantage of trading using opposite Vanguard Small-cap and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap 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.| Vanguard Small-cap vs. Vanguard Mid Cap Value | Vanguard Small-cap vs. Vanguard Value Index | Vanguard Small-cap vs. Vanguard Small Cap Growth | Vanguard Small-cap vs. Vanguard Emerging Markets |
| Calvert Emerging vs. Morgan Stanley Global | Calvert Emerging vs. Legg Mason Global | Calvert Emerging vs. Jhancock Global Equity | Calvert Emerging vs. The Hartford Global |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |