Correlation Between Calvert Global and Baron Fifth

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

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

Diversification Opportunities for Calvert Global and Baron Fifth

-0.31

Correlation Coefficient

Calvert Global  Baron Fifth

Very good diversification

The 3 months correlation between Calvert and Baron is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Baron Fifth Avenue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fifth Avenue and Calvert Global 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 Global Energy are associated (or correlated) with Baron Fifth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fifth Avenue has no effect on the direction of Calvert Global i.e., Calvert Global and Baron Fifth go up and down completely randomly.

Pair Corralation between Calvert Global and Baron Fifth

Assuming the 90 days horizon Calvert Global is expected to generate 15.56 times less return on investment than Baron Fifth. But when comparing it to its historical volatility, Calvert Global Energy is 1.24 times less risky than Baron Fifth. It trades about 0.02 of its potential returns per unit of risk. Baron Fifth Avenue is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  4,837  in Baron Fifth Avenue on September 3, 2024 and sell it today you would earn a total of  1,017  from holding Baron Fifth Avenue or generate 21.03% return on investment over 90 days.

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

Calvert Global Energy  vs.  Baron Fifth Avenue

Calvert Global Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Calvert Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baron Fifth Avenue

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Fifth Avenue are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Baron Fifth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Global and Baron Fifth

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

The idea behind Calvert Global Energy and Baron Fifth Avenue 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.