Correlation Between Foundry Partners and Calvert Global

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

By analyzing existing cross correlation between Foundry Partners Fundamental and Calvert Global Energy, you can compare the effects of market volatilities on Foundry Partners and Calvert 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 Foundry Partners with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foundry Partners and Calvert Global.

Diversification Opportunities for Foundry Partners and Calvert Global

0.64

Correlation Coefficient

Foundry Partners  Calvert Global

Poor diversification

The 3 months correlation between Foundry and Calvert is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Foundry Partners Fundamental and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Foundry Partners 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 Foundry Partners Fundamental are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Foundry Partners i.e., Foundry Partners and Calvert Global go up and down completely randomly.

Pair Corralation between Foundry Partners and Calvert Global

Assuming the 90 days horizon Foundry Partners Fundamental is expected to under-perform the Calvert Global. In addition to that, Foundry Partners is 1.29 times more volatile than Calvert Global Energy. It trades about -0.05 of its total potential returns per unit of risk. Calvert Global Energy is currently generating about 0.06 per unit of volatility. If you would invest  1,041  in Calvert Global Energy on February 2, 2025 and sell it today you would earn a total of  56.00  from holding Calvert Global Energy or generate 5.38% return on investment over 90 days.

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

Foundry Partners Fundamental  vs.  Calvert Global Energy

Foundry Partners Fun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Foundry Partners Fundamental has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Calvert Global Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Foundry Partners and Calvert Global

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

The idea behind Foundry Partners Fundamental and Calvert Global Energy 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.