Correlation Between Calvert Developed and Calvert Mortgage

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

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

Diversification Opportunities for Calvert Developed and Calvert Mortgage

0.72

Correlation Coefficient

Calvert Developed  Calvert Mortgage

Poor diversification

The 3 months correlation between Calvert and Calvert is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Calvert Mortgage Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Mortgage Access and Calvert Developed 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 Developed Market are associated (or correlated) with Calvert Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Mortgage Access has no effect on the direction of Calvert Developed i.e., Calvert Developed and Calvert Mortgage go up and down completely randomly.

Pair Corralation between Calvert Developed and Calvert Mortgage

Assuming the 90 days horizon Calvert Developed Market is expected to generate 2.02 times more return on investment than Calvert Mortgage. However, Calvert Developed is 2.02 times more volatile than Calvert Mortgage Access. It trades about 0.24 of its potential returns per unit of risk. Calvert Mortgage Access is currently generating about 0.07 per unit of risk. If you would invest  3,165  in Calvert Developed Market on April 28, 2025 and sell it today you would earn a total of  354.00  from holding Calvert Developed Market or generate 11.18% return on investment over 90 days.

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

Calvert Developed Market  vs.  Calvert Mortgage Access

Calvert Developed Market

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Developed Market are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Developed may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Calvert Mortgage Access

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Mortgage Access are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Mortgage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Developed and Calvert Mortgage

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

The idea behind Calvert Developed Market and Calvert Mortgage Access 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.