Correlation Between Steelpath Select and Calvert Emerging

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

By analyzing existing cross correlation between Steelpath Select 40 and Calvert Emerging Markets, you can compare the effects of market volatilities on Steelpath Select and Calvert Emerging 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 Steelpath Select with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steelpath Select and Calvert Emerging.

Diversification Opportunities for Steelpath Select and Calvert Emerging

-0.86

Correlation Coefficient

Steelpath Select  Calvert Emerging

Pay attention - limited upside

The 3 months correlation between Steelpath and Calvert is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Steelpath Select 40 and Calvert Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Emerging Markets and Steelpath Select 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 Steelpath Select 40 are associated (or correlated) with Calvert Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Emerging Markets has no effect on the direction of Steelpath Select i.e., Steelpath Select and Calvert Emerging go up and down completely randomly.

Pair Corralation between Steelpath Select and Calvert Emerging

Assuming the 90 days horizon Steelpath Select 40 is expected to generate 1.08 times more return on investment than Calvert Emerging. However, Steelpath Select is 1.08 times more volatile than Calvert Emerging Markets. It trades about 0.17 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about -0.14 per unit of risk. If you would invest  694.00  in Steelpath Select 40 on September 15, 2024 and sell it today you would earn a total of  64.00  from holding Steelpath Select 40 or generate 9.22% return on investment over 90 days.

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

Steelpath Select 40  vs.  Calvert Emerging Markets

Steelpath Select

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Steelpath Select 40 are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Steelpath Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Calvert Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Steelpath Select and Calvert Emerging

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

The idea behind Steelpath Select 40 and Calvert Emerging Markets 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.