Correlation Between Oil Gas and Calvert Ultra-short

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

By analyzing existing cross correlation between Oil Gas Ultrasector and Calvert Ultra Short Duration, you can compare the effects of market volatilities on Oil Gas and Calvert Ultra-short 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 Oil Gas with a short position of Calvert Ultra-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Calvert Ultra-short.

Diversification Opportunities for Oil Gas and Calvert Ultra-short

-0.23

Correlation Coefficient

Oil Gas  Calvert Ultra-short

Very good diversification

The 3 months correlation between Oil and Calvert is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Calvert Ultra Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Ultra Short and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Calvert Ultra-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Ultra Short has no effect on the direction of Oil Gas i.e., Oil Gas and Calvert Ultra-short go up and down completely randomly.

Pair Corralation between Oil Gas and Calvert Ultra-short

Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 18.58 times more return on investment than Calvert Ultra-short. However, Oil Gas is 18.58 times more volatile than Calvert Ultra Short Duration. It trades about 0.02 of its potential returns per unit of risk. Calvert Ultra Short Duration is currently generating about 0.22 per unit of risk. If you would invest  3,499  in Oil Gas Ultrasector on October 24, 2024 and sell it today you would earn a total of  298.00  from holding Oil Gas Ultrasector or generate 8.52% return on investment over 90 days.

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

Oil Gas Ultrasector  vs.  Calvert Ultra Short Duration

Oil Gas Ultrasector

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oil Gas Ultrasector are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oil Gas may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Calvert Ultra Short

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Ultra Short Duration are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Ultra-short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oil Gas and Calvert Ultra-short

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

The idea behind Oil Gas Ultrasector and Calvert Ultra Short Duration 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.