Correlation Between Visa and Calvert Global

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

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

Diversification Opportunities for Visa and Calvert Global

-0.28

Correlation Coefficient

Visa  Calvert Global

Very good diversification

The 3 months correlation between Visa and Calvert is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Calvert Global go up and down completely randomly.

Pair Corralation between Visa and Calvert Global

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.95 times more return on investment than Calvert Global. However, Visa Class A is 1.05 times less risky than Calvert Global. It trades about 0.07 of its potential returns per unit of risk. Calvert Global Energy is currently generating about -0.02 per unit of risk. If you would invest  22,072  in Visa Class A on October 13, 2024 and sell it today you would earn a total of  8,699  from holding Visa Class A or generate 39.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Visa Class A  vs.  Calvert Global Energy

Visa Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Calvert Global Energy

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Visa and Calvert Global

The main advantage of trading using opposite Visa and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.