Correlation Between Us Global and Calvert Aggressive

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

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

Diversification Opportunities for Us Global and Calvert Aggressive

0.9

Correlation Coefficient

Us Global  Calvert Aggressive

Almost no diversification

The 3 months correlation between USLUX and Calvert is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Investors and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and Us Global 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 Us Global Investors are associated (or correlated) with Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of Us Global i.e., Us Global and Calvert Aggressive go up and down completely randomly.

Pair Corralation between Us Global and Calvert Aggressive

Assuming the 90 days horizon Us Global Investors is expected to generate 1.29 times more return on investment than Calvert Aggressive. However, Us Global is 1.29 times more volatile than Calvert Aggressive Allocation. It trades about -0.02 of its potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about -0.05 per unit of risk. If you would invest  2,021  in Us Global Investors on December 21, 2024 and sell it today you would lose (34.00) from holding Us Global Investors or give up 1.68% of portfolio value over 90 days.

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

Us Global Investors  vs.  Calvert Aggressive Allocation

Us Global Investors

Risk-Adjusted Performance

Very Weak

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

Calvert Aggressive

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Us Global and Calvert Aggressive

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

The idea behind Us Global Investors and Calvert Aggressive Allocation 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.