Correlation Between Calvert International and Vanguard Information

Can any of the company-specific risk be diversified away by investing in both Calvert International and Vanguard Information 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 Vanguard Information 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 Vanguard Information Technology, you can compare the effects of market volatilities on Calvert International and Vanguard Information 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 Vanguard Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert International and Vanguard Information.

Diversification Opportunities for Calvert International and Vanguard Information

0.11

Correlation Coefficient

Calvert International  Vanguard Information

Average diversification

The 3 months correlation between Calvert and Vanguard is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Calvert International Equity and Vanguard Information Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Information 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 Vanguard Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Information has no effect on the direction of Calvert International i.e., Calvert International and Vanguard Information go up and down completely randomly.

Pair Corralation between Calvert International and Vanguard Information

Assuming the 90 days horizon Calvert International is expected to generate 13.13 times less return on investment than Vanguard Information. But when comparing it to its historical volatility, Calvert International Equity is 1.06 times less risky than Vanguard Information. It trades about 0.02 of its potential returns per unit of risk. Vanguard Information Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  31,196  in Vanguard Information Technology on May 26, 2025 and sell it today you would earn a total of  4,346  from holding Vanguard Information Technology or generate 13.93% 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.  Vanguard Information Technolog

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.

Vanguard Information

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Information Technology are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Information showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert International and Vanguard Information

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

The idea behind Calvert International Equity and Vanguard Information Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.