Correlation Between Calvert International and Great West

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

By analyzing existing cross correlation between Calvert International Equity and Great West Inflation Protected Securities, you can compare the effects of market volatilities on Calvert International and Great West 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 International with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert International and Great West.

Diversification Opportunities for Calvert International and Great West

0.03

Correlation Coefficient

Calvert International  Great West

Significant diversification

The 3 months correlation between Calvert and Great is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calvert International Equity and Great West Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Inflation and Calvert International 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 International Equity are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Inflation has no effect on the direction of Calvert International i.e., Calvert International and Great West go up and down completely randomly.

Pair Corralation between Calvert International and Great West

Assuming the 90 days horizon Calvert International Equity is expected to generate 2.76 times more return on investment than Great West. However, Calvert International is 2.76 times more volatile than Great West Inflation Protected Securities. It trades about 0.07 of its potential returns per unit of risk. Great West Inflation Protected Securities is currently generating about 0.07 per unit of risk. If you would invest  2,007  in Calvert International Equity on February 13, 2025 and sell it today you would earn a total of  594.00  from holding Calvert International Equity or generate 29.6% return on investment over 90 days.

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

Calvert International Equity  vs.  Great West Inflation Protected

Calvert International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert International Equity are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Great West Inflation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Inflation Protected Securities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Great West 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 International and Great West

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

The idea behind Calvert International Equity and Great West Inflation Protected Securities 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.