Correlation Between Calvert Moderate and Catalyst/map Global

Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Catalyst/map 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 Calvert Moderate and Catalyst/map Global 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 Catalystmap Global Equity, you can compare the effects of market volatilities on Calvert Moderate and Catalyst/map 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 Calvert Moderate with a short position of Catalyst/map Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Catalyst/map Global.

Diversification Opportunities for Calvert Moderate and Catalyst/map Global

0.54

Correlation Coefficient

Calvert Moderate  Catalyst/map Global

Very weak diversification

The 3 months correlation between Calvert and Catalyst/map is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Catalystmap Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global Equity 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 Catalyst/map Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global Equity has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Catalyst/map Global go up and down completely randomly.

Pair Corralation between Calvert Moderate and Catalyst/map Global

Assuming the 90 days horizon Calvert Moderate is expected to generate 1.01 times less return on investment than Catalyst/map Global. But when comparing it to its historical volatility, Calvert Moderate Allocation is 1.12 times less risky than Catalyst/map Global. It trades about 0.04 of its potential returns per unit of risk. Catalystmap Global Equity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,571  in Catalystmap Global Equity on October 23, 2024 and sell it today you would earn a total of  161.00  from holding Catalystmap Global Equity or generate 10.25% return on investment over 90 days.

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

Calvert Moderate Allocation  vs.  Catalystmap Global Equity

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 fundamental indicators, Calvert Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystmap Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalystmap Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward 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 Moderate and Catalyst/map Global

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

The idea behind Calvert Moderate Allocation and Catalystmap Global Equity 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.