Correlation Between Calvert Balanced and Gmo Global

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

Diversification Opportunities for Calvert Balanced and Gmo Global

0.98

Correlation Coefficient

Calvert Balanced  Gmo Global

Almost no diversification

The 3 months correlation between Calvert and Gmo is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Balanced Portfolio and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity 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 Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Calvert Balanced i.e., Calvert Balanced and Gmo Global go up and down completely randomly.

Pair Corralation between Calvert Balanced and Gmo Global

Assuming the 90 days horizon Calvert Balanced is expected to generate 1.12 times less return on investment than Gmo Global. But when comparing it to its historical volatility, Calvert Balanced Portfolio is 1.24 times less risky than Gmo Global. It trades about 0.38 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  2,755  in Gmo Global Equity on April 20, 2025 and sell it today you would earn a total of  417.00  from holding Gmo Global Equity or generate 15.14% return on investment over 90 days.

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

Calvert Balanced Portfolio  vs.  Gmo Global Equity

Calvert Balanced Por

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Balanced Portfolio are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Calvert Balanced showed solid returns over the last few months and may actually be approaching a breakup point.

Gmo Global Equity

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Global Equity are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gmo Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Balanced and Gmo Global

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

The idea behind Calvert Balanced Portfolio and Gmo Global Equity 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..