Correlation Between Calvert Emerging and Virtus Emerging

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

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

Diversification Opportunities for Calvert Emerging and Virtus Emerging

0.88

Correlation Coefficient

Calvert Emerging  Virtus Emerging

Very poor diversification

The 3 months correlation between Calvert and Virtus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Virtus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Emerging Markets and Calvert Emerging 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 Calvert Emerging Markets are associated (or correlated) with Virtus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Emerging Markets has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Virtus Emerging go up and down completely randomly.

Pair Corralation between Calvert Emerging and Virtus Emerging

Assuming the 90 days horizon Calvert Emerging is expected to generate 1.08 times less return on investment than Virtus Emerging. In addition to that, Calvert Emerging is 1.29 times more volatile than Virtus Emerging Markets. It trades about 0.26 of its total potential returns per unit of risk. Virtus Emerging Markets is currently generating about 0.37 per unit of volatility. If you would invest  1,596  in Virtus Emerging Markets on February 28, 2025 and sell it today you would earn a total of  62.00  from holding Virtus Emerging Markets or generate 3.88% return on investment over 90 days.

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

Calvert Emerging Markets  vs.  Virtus Emerging Markets

Calvert Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Emerging Markets are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Virtus Emerging Markets

Risk-Adjusted Performance

OK

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

Pair Trading with Calvert Emerging and Virtus Emerging

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

The idea behind Calvert Emerging Markets and Virtus Emerging Markets 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.