Correlation Between Calvert Global and Baron Opportunity

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

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

Diversification Opportunities for Calvert Global and Baron Opportunity

-0.28

Correlation Coefficient

Calvert Global  Baron Opportunity

Very good diversification

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

Pair Corralation between Calvert Global and Baron Opportunity

Assuming the 90 days horizon Calvert Global is expected to generate 20.42 times less return on investment than Baron Opportunity. But when comparing it to its historical volatility, Calvert Global Energy is 1.25 times less risky than Baron Opportunity. It trades about 0.02 of its potential returns per unit of risk. Baron Opportunity Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  4,377  in Baron Opportunity Fund on September 5, 2024 and sell it today you would earn a total of  869.00  from holding Baron Opportunity Fund or generate 19.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Calvert Global Energy  vs.  Baron Opportunity Fund

Calvert Global Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Calvert Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baron Opportunity

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Opportunity Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Baron Opportunity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Global and Baron Opportunity

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

The idea behind Calvert Global Energy and Baron Opportunity Fund 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.