Correlation Between Calvert Developed and Ab Core

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Can any of the company-specific risk be diversified away by investing in both Calvert Developed and Ab Core 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 Ab Core 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 Ab E Opportunities, you can compare the effects of market volatilities on Calvert Developed and Ab Core 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 Ab Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Developed and Ab Core.

Diversification Opportunities for Calvert Developed and Ab Core

CalvertADGAXDiversified AwayCalvertADGAXDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Calvert and ADGAX is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Ab E Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab E Opportunities 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 Ab Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab E Opportunities has no effect on the direction of Calvert Developed i.e., Calvert Developed and Ab Core go up and down completely randomly.

Pair Corralation between Calvert Developed and Ab Core

Assuming the 90 days horizon Calvert Developed Market is expected to generate 0.51 times more return on investment than Ab Core. However, Calvert Developed Market is 1.98 times less risky than Ab Core. It trades about 0.13 of its potential returns per unit of risk. Ab E Opportunities is currently generating about -0.05 per unit of risk. If you would invest  2,984  in Calvert Developed Market on November 18, 2024 and sell it today you would earn a total of  179.00  from holding Calvert Developed Market or generate 6.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Calvert Developed Market  vs.  Ab E Opportunities

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50
JavaScript chart by amCharts 3.21.15CDHIX ADGAX
       Timeline  
Calvert Developed Market 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Developed Market are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb29.53030.53131.5
Ab E Opportunities 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ab E Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2323.52424.52525.52626.5

Calvert Developed and Ab Core Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.35-1.76-1.17-0.580.00.591.21.82.413.01 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15CDHIX ADGAX
       Returns  

Pair Trading with Calvert Developed and Ab Core

The main advantage of trading using opposite Calvert Developed and Ab Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Developed position performs unexpectedly, Ab Core 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 Ab Core will offset losses from the drop in Ab Core's long position.
The idea behind Calvert Developed Market and Ab E 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.
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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