Correlation Between Calvert Moderate and Wanger International

Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Wanger International 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 Wanger International 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 Wanger International Wanger, you can compare the effects of market volatilities on Calvert Moderate and Wanger International 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 Wanger International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Wanger International.

Diversification Opportunities for Calvert Moderate and Wanger International

0.22

Correlation Coefficient

Calvert Moderate  Wanger International

Modest diversification

The 3 months correlation between Calvert and Wanger is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Wanger International Wanger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanger International 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 Wanger International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanger International has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Wanger International go up and down completely randomly.

Pair Corralation between Calvert Moderate and Wanger International

Assuming the 90 days horizon Calvert Moderate Allocation is expected to under-perform the Wanger International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Moderate Allocation is 1.02 times less risky than Wanger International. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Wanger International Wanger is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest  1,949  in Wanger International Wanger on October 10, 2024 and sell it today you would lose (84.00) from holding Wanger International Wanger or give up 4.31% of portfolio value over 90 days.

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

Calvert Moderate Allocation  vs.  Wanger International Wanger

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.

Wanger International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wanger International Wanger has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak 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 Moderate and Wanger International

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

The idea behind Calvert Moderate Allocation and Wanger International Wanger 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.