Correlation Between Calvert Emerging and Goldman Sachs

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

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

Diversification Opportunities for Calvert Emerging and Goldman Sachs

-0.68

Correlation Coefficient

Calvert Emerging  Goldman Sachs

Excellent diversification

The 3 months correlation between Calvert and Goldman is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Goldman Sachs Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Calvert Emerging 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 Emerging Markets are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Short has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Goldman Sachs go up and down completely randomly.

Pair Corralation between Calvert Emerging and Goldman Sachs

Assuming the 90 days horizon Calvert Emerging Markets is expected to under-perform the Goldman Sachs. In addition to that, Calvert Emerging is 11.12 times more volatile than Goldman Sachs Short Term. It trades about -0.05 of its total potential returns per unit of risk. Goldman Sachs Short Term is currently generating about 0.23 per unit of volatility. If you would invest  998.00  in Goldman Sachs Short Term on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Goldman Sachs Short Term or generate 1.2% return on investment over 90 days.

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

Calvert Emerging Markets  vs.  Goldman Sachs Short Term

Calvert Emerging Markets

Risk-Adjusted Performance

Very Weak

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

Goldman Sachs Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Short Term are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs 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 Emerging and Goldman Sachs

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

The idea behind Calvert Emerging Markets and Goldman Sachs Short Term 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.