Correlation Between Calvert Global and California Municipal
Can any of the company-specific risk be diversified away by investing in both Calvert Global and California Municipal 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 Global and California Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Global Equity and California Municipal Portfolio, you can compare the effects of market volatilities on Calvert Global and California Municipal 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 Global with a short position of California Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and California Municipal.
Diversification Opportunities for Calvert Global and California Municipal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and California is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Equity and California Municipal Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Municipal and Calvert 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 Calvert Global Equity are associated (or correlated) with California Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Municipal has no effect on the direction of Calvert Global i.e., Calvert Global and California Municipal go up and down completely randomly.
Pair Corralation between Calvert Global and California Municipal
Assuming the 90 days horizon Calvert Global Equity is expected to generate 7.63 times more return on investment than California Municipal. However, Calvert Global is 7.63 times more volatile than California Municipal Portfolio. It trades about 0.31 of its potential returns per unit of risk. California Municipal Portfolio is currently generating about 0.16 per unit of risk. If you would invest 1,603 in Calvert Global Equity on April 26, 2025 and sell it today you would earn a total of 236.00 from holding Calvert Global Equity or generate 14.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Calvert Global Equity vs. California Municipal Portfolio
Performance |
Timeline |
Calvert Global Equity |
California Municipal |
Calvert Global and California Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calvert Global and California Municipal
The main advantage of trading using opposite Calvert Global and California Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, California Municipal 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 California Municipal will offset losses from the drop in California Municipal's long position.Calvert Global vs. Western Asset Short | Calvert Global vs. Franklin Federal Limited Term | Calvert Global vs. Nuveen Short Term | Calvert Global vs. Barings Active Short |
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Check out your portfolio center.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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