Correlation Between Calvert Conservative and Global Technology

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

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

Diversification Opportunities for Calvert Conservative and Global Technology

0.02

Correlation Coefficient

Calvert Conservative  Global Technology

Significant diversification

The 3 months correlation between Calvert and GLOBAL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology and Calvert Conservative 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 Conservative Allocation are associated (or correlated) with Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Global Technology go up and down completely randomly.

Pair Corralation between Calvert Conservative and Global Technology

Assuming the 90 days horizon Calvert Conservative Allocation is expected to generate 0.23 times more return on investment than Global Technology. However, Calvert Conservative Allocation is 4.4 times less risky than Global Technology. It trades about 0.07 of its potential returns per unit of risk. Global Technology Portfolio is currently generating about -0.08 per unit of risk. If you would invest  1,782  in Calvert Conservative Allocation on December 27, 2024 and sell it today you would earn a total of  27.00  from holding Calvert Conservative Allocation or generate 1.52% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Global Technology Portfolio

Calvert Conservative

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Conservative Allocation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Technology Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating 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 Calvert Conservative and Global Technology

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

The idea behind Calvert Conservative Allocation and Global Technology Portfolio 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.