Correlation Between Federated Mdt and Calvert Global

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

By analyzing existing cross correlation between Federated Mdt Large and Calvert Global Energy, you can compare the effects of market volatilities on Federated Mdt and Calvert Global 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 Federated Mdt with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Calvert Global.

Diversification Opportunities for Federated Mdt and Calvert Global

0.8

Correlation Coefficient

Federated Mdt  Calvert Global

Very poor diversification

The 3 months correlation between Federated and Calvert is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Federated Mdt 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 Federated Mdt Large are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Federated Mdt i.e., Federated Mdt and Calvert Global go up and down completely randomly.

Pair Corralation between Federated Mdt and Calvert Global

Assuming the 90 days horizon Federated Mdt Large is expected to generate 0.89 times more return on investment than Calvert Global. However, Federated Mdt Large is 1.12 times less risky than Calvert Global. It trades about 0.06 of its potential returns per unit of risk. Calvert Global Energy is currently generating about -0.01 per unit of risk. If you would invest  2,482  in Federated Mdt Large on December 2, 2024 and sell it today you would earn a total of  767.00  from holding Federated Mdt Large or generate 30.9% return on investment over 90 days.

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

Federated Mdt Large  vs.  Calvert Global Energy

Federated Mdt Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federated Mdt Large 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 forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Calvert Global Energy

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Federated Mdt and Calvert Global

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

The idea behind Federated Mdt Large and Calvert Global Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.