Correlation Between Calvert Balanced and Calvert Global

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

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

Diversification Opportunities for Calvert Balanced and Calvert Global

0.64

Correlation Coefficient

Calvert Balanced  Calvert Global

Poor diversification

The 3 months correlation between Calvert and Calvert is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio 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 Calvert Balanced 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 Balanced Portfolio 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 Calvert Balanced i.e., Calvert Balanced and Calvert Global go up and down completely randomly.

Pair Corralation between Calvert Balanced and Calvert Global

Assuming the 90 days horizon Calvert Balanced Portfolio is expected to under-perform the Calvert Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Balanced Portfolio is 1.35 times less risky than Calvert Global. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Calvert Global Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,068  in Calvert Global Energy on February 13, 2025 and sell it today you would earn a total of  70.00  from holding Calvert Global Energy or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Calvert Balanced Portfolio  vs.  Calvert Global Energy

Calvert Balanced Por

Risk-Adjusted Performance

Very Weak

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

Calvert Global Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Global may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Calvert Balanced and Calvert Global

The main advantage of trading using opposite Calvert Balanced and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Balanced 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 Calvert Balanced Portfolio 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.