Correlation Between Calvert Developed and Quantified Common

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

By analyzing existing cross correlation between Calvert Developed Market and Quantified Common Ground, you can compare the effects of market volatilities on Calvert Developed and Quantified Common 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 Developed with a short position of Quantified Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Quantified Common.

Diversification Opportunities for Calvert Developed and Quantified Common

-0.28

Correlation Coefficient

Calvert Developed  Quantified Common

Very good diversification

The 3 months correlation between Calvert and Quantified is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Quantified Common Ground in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantified Common Ground and Calvert Developed 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 Developed Market are associated (or correlated) with Quantified Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantified Common Ground has no effect on the direction of Calvert Developed i.e., Calvert Developed and Quantified Common go up and down completely randomly.

Pair Corralation between Calvert Developed and Quantified Common

Assuming the 90 days horizon Calvert Developed is expected to generate 1.39 times less return on investment than Quantified Common. In addition to that, Calvert Developed is 1.07 times more volatile than Quantified Common Ground. It trades about 0.06 of its total potential returns per unit of risk. Quantified Common Ground is currently generating about 0.09 per unit of volatility. If you would invest  1,397  in Quantified Common Ground on September 12, 2024 and sell it today you would earn a total of  236.00  from holding Quantified Common Ground or generate 16.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Calvert Developed Market  vs.  Quantified Common Ground

Calvert Developed Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Developed Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Calvert Developed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Quantified Common Ground

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quantified Common Ground are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Quantified Common 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 Developed and Quantified Common

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

The idea behind Calvert Developed Market and Quantified Common Ground 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.