Correlation Between Calvert Equity and Walden Equity

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

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

Diversification Opportunities for Calvert Equity and Walden Equity

0.62

Correlation Coefficient

Calvert Equity  Walden Equity

Poor diversification

The 3 months correlation between Calvert and Walden is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Equity Portfolio and Walden Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Equity and Calvert Equity 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 Equity Portfolio are associated (or correlated) with Walden Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Equity has no effect on the direction of Calvert Equity i.e., Calvert Equity and Walden Equity go up and down completely randomly.

Pair Corralation between Calvert Equity and Walden Equity

Assuming the 90 days horizon Calvert Equity is expected to generate 2.66 times less return on investment than Walden Equity. But when comparing it to its historical volatility, Calvert Equity Portfolio is 1.02 times less risky than Walden Equity. It trades about 0.05 of its potential returns per unit of risk. Walden Equity Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,681  in Walden Equity Fund on September 12, 2024 and sell it today you would earn a total of  196.00  from holding Walden Equity Fund or generate 5.32% return on investment over 90 days.

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

Calvert Equity Portfolio  vs.  Walden Equity Fund

Calvert Equity Portfolio

Risk-Adjusted Performance

4 of 100

Insignificant

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

Walden Equity

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walden Equity Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Walden Equity 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 Equity and Walden Equity

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

The idea behind Calvert Equity Portfolio and Walden Equity 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.