Correlation Between Calvert Emerging and Mid-cap 15x

Can any of the company-specific risk be diversified away by investing in both Calvert Emerging and Mid-cap 15x 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 Mid-cap 15x 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 Mid Cap 15x Strategy, you can compare the effects of market volatilities on Calvert Emerging and Mid-cap 15x 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 Mid-cap 15x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Mid-cap 15x.

Diversification Opportunities for Calvert Emerging and Mid-cap 15x

0.31

Correlation Coefficient

Calvert Emerging  Mid-cap 15x

Weak diversification

The 3 months correlation between Calvert and Mid-cap is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x 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 Mid-cap 15x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap 15x has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Mid-cap 15x go up and down completely randomly.

Pair Corralation between Calvert Emerging and Mid-cap 15x

Assuming the 90 days horizon Calvert Emerging Markets is expected to under-perform the Mid-cap 15x. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Emerging Markets is 1.8 times less risky than Mid-cap 15x. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Mid Cap 15x Strategy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  13,296  in Mid Cap 15x Strategy on October 23, 2024 and sell it today you would earn a total of  656.00  from holding Mid Cap 15x Strategy or generate 4.93% return on investment over 90 days.

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

Calvert Emerging Markets  vs.  Mid Cap 15x Strategy

Calvert Emerging Markets

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Mid Cap 15x

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mid-cap 15x 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 Mid-cap 15x

The main advantage of trading using opposite Calvert Emerging and Mid-cap 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Emerging position performs unexpectedly, Mid-cap 15x 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 Mid-cap 15x will offset losses from the drop in Mid-cap 15x's long position.

The idea behind Calvert Emerging Markets and Mid Cap 15x Strategy 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.

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.