Correlation Between Calvert International and Wcm Focused

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

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

Diversification Opportunities for Calvert International and Wcm Focused

0.33

Correlation Coefficient

Calvert International  Wcm Focused

Weak diversification

The 3 months correlation between Calvert and Wcm is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Calvert International Opportun and Wcm Focused Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm Focused Emerging and Calvert International 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 International Opportunities are associated (or correlated) with Wcm Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm Focused Emerging has no effect on the direction of Calvert International i.e., Calvert International and Wcm Focused go up and down completely randomly.

Pair Corralation between Calvert International and Wcm Focused

Assuming the 90 days horizon Calvert International Opportunities is expected to under-perform the Wcm Focused. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert International Opportunities is 1.06 times less risky than Wcm Focused. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Wcm Focused Emerging is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1,514  in Wcm Focused Emerging on October 11, 2024 and sell it today you would lose (59.00) from holding Wcm Focused Emerging or give up 3.9% of portfolio value over 90 days.

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

Calvert International Opportun  vs.  Wcm Focused Emerging

Calvert International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert International Opportunities 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.

Wcm Focused Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wcm Focused Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Wcm Focused 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 International and Wcm Focused

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

The idea behind Calvert International Opportunities and Wcm Focused Emerging 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.