Correlation Between Quantified Common and Calvert Developed

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

By analyzing existing cross correlation between Quantified Common Ground and Calvert Developed Market, you can compare the effects of market volatilities on Quantified Common and Calvert Developed 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 Quantified Common with a short position of Calvert Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantified Common and Calvert Developed.

Diversification Opportunities for Quantified Common and Calvert Developed

-0.23

Correlation Coefficient

Quantified Common  Calvert Developed

Very good diversification

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

Pair Corralation between Quantified Common and Calvert Developed

Assuming the 90 days horizon Quantified Common Ground is expected to under-perform the Calvert Developed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Quantified Common Ground is 1.01 times less risky than Calvert Developed. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Calvert Developed Market is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,946  in Calvert Developed Market on December 30, 2024 and sell it today you would earn a total of  181.00  from holding Calvert Developed Market or generate 6.14% return on investment over 90 days.

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

Quantified Common Ground  vs.  Calvert Developed Market

Quantified Common Ground

Risk-Adjusted Performance

Very Weak

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

Calvert Developed Market

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Developed Market are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Developed may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Quantified Common and Calvert Developed

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

The idea behind Quantified Common Ground and Calvert Developed Market 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.