Correlation Between Calvert Aggressive and Calvert Global

Can any of the company-specific risk be diversified away by investing in both Calvert Aggressive and Calvert Global 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 Aggressive and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calvert Aggressive Allocation and Calvert Global Water, you can compare the effects of market volatilities on Calvert Aggressive and Calvert Global 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 Aggressive with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Aggressive and Calvert Global.

Diversification Opportunities for Calvert Aggressive and Calvert Global

0.58

Correlation Coefficient

Calvert Aggressive  Calvert Global

Very weak diversification

The 3 months correlation between Calvert and Calvert is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and Calvert Global Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Water and Calvert Aggressive 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 Aggressive Allocation are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Water has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and Calvert Global go up and down completely randomly.

Pair Corralation between Calvert Aggressive and Calvert Global

Assuming the 90 days horizon Calvert Aggressive Allocation is expected to generate 0.83 times more return on investment than Calvert Global. However, Calvert Aggressive Allocation is 1.2 times less risky than Calvert Global. It trades about 0.1 of its potential returns per unit of risk. Calvert Global Water is currently generating about 0.08 per unit of risk. If you would invest  2,396  in Calvert Aggressive Allocation on September 2, 2024 and sell it today you would earn a total of  446.00  from holding Calvert Aggressive Allocation or generate 18.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Calvert Aggressive Allocation  vs.  Calvert Global Water

Calvert Aggressive

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Aggressive Allocation are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Global Water

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Water are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Aggressive and Calvert Global

The main advantage of trading using opposite Calvert Aggressive and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Aggressive position performs unexpectedly, Calvert Global 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 Global will offset losses from the drop in Calvert Global's long position.

The idea behind Calvert Aggressive Allocation and Calvert Global Water 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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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.