Correlation Between Guidemark Large and Calvert International

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

By analyzing existing cross correlation between Guidemark Large Cap and Calvert International Opportunities, you can compare the effects of market volatilities on Guidemark Large and Calvert International 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 Guidemark Large with a short position of Calvert International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Calvert International.

Diversification Opportunities for Guidemark Large and Calvert International

0.38

Correlation Coefficient

Guidemark Large  Calvert International

Weak diversification

The 3 months correlation between Guidemark and Calvert is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Calvert International Opportun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert International and Guidemark Large 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 Guidemark Large Cap are associated (or correlated) with Calvert International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert International has no effect on the direction of Guidemark Large i.e., Guidemark Large and Calvert International go up and down completely randomly.

Pair Corralation between Guidemark Large and Calvert International

Assuming the 90 days horizon Guidemark Large Cap is expected to generate 0.95 times more return on investment than Calvert International. However, Guidemark Large Cap is 1.05 times less risky than Calvert International. It trades about 0.06 of its potential returns per unit of risk. Calvert International Opportunities is currently generating about 0.04 per unit of risk. If you would invest  954.00  in Guidemark Large Cap on September 12, 2024 and sell it today you would earn a total of  227.00  from holding Guidemark Large Cap or generate 23.79% return on investment over 90 days.

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

Guidemark Large Cap  vs.  Calvert International Opportun

Guidemark Large Cap

Risk-Adjusted Performance

4 of 100

Modest

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

Calvert International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Guidemark Large and Calvert International

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

The idea behind Guidemark Large Cap and Calvert International Opportunities 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.