Correlation Between Calvert Moderate and Oberweis Emerging

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

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

Diversification Opportunities for Calvert Moderate and Oberweis Emerging

0.64

Correlation Coefficient

Calvert Moderate  Oberweis Emerging

Poor diversification

The 3 months correlation between Calvert and Oberweis is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Oberweis Emerging Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Emerging Growth and Calvert Moderate 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 Moderate Allocation are associated (or correlated) with Oberweis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Emerging Growth has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Oberweis Emerging go up and down completely randomly.

Pair Corralation between Calvert Moderate and Oberweis Emerging

Assuming the 90 days horizon Calvert Moderate Allocation is expected to under-perform the Oberweis Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Moderate Allocation is 1.57 times less risky than Oberweis Emerging. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Oberweis Emerging Growth is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  3,100  in Oberweis Emerging Growth on October 11, 2024 and sell it today you would lose (75.00) from holding Oberweis Emerging Growth or give up 2.42% of portfolio value over 90 days.

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

Calvert Moderate Allocation  vs.  Oberweis Emerging Growth

Calvert Moderate All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Moderate Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Calvert Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oberweis Emerging Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oberweis Emerging Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Oberweis Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Moderate and Oberweis Emerging

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

The idea behind Calvert Moderate Allocation and Oberweis Emerging Growth 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 CEOs Directory module to screen CEOs from public companies around the world.