Correlation Between Invesco SP and Calvert Global

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

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

Diversification Opportunities for Invesco SP and Calvert Global

0.82

Correlation Coefficient

Invesco SP  Calvert Global

Very poor diversification

The 3 months correlation between Invesco and Calvert is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP Global and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Invesco SP 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 Invesco SP Global are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Invesco SP i.e., Invesco SP and Calvert Global go up and down completely randomly.

Pair Corralation between Invesco SP and Calvert Global

Considering the 90-day investment horizon Invesco SP Global is expected to under-perform the Calvert Global. But the etf apears to be less risky and, when comparing its historical volatility, Invesco SP Global is 1.07 times less risky than Calvert Global. The etf trades about -0.26 of its potential returns per unit of risk. The Calvert Global Energy is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Calvert Global Energy on October 15, 2024 and sell it today you would lose (106.00) from holding Calvert Global Energy or give up 9.37% of portfolio value over 90 days.

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

Invesco SP Global  vs.  Calvert Global Energy

Invesco SP Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco SP Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Calvert Global Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Global Energy has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 Invesco SP and Calvert Global

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

The idea behind Invesco SP Global and Calvert Global Energy 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 Stocks Directory module to find actively traded stocks across global markets.