Correlation Between Financials Ultrasector and Calvert Global

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

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

Diversification Opportunities for Financials Ultrasector and Calvert Global

0.93

Correlation Coefficient

Financials Ultrasector  Calvert Global

Almost no diversification

The 3 months correlation between Financials and Calvert is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Financials Ultrasector Profund and Calvert Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Equity and Financials Ultrasector 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 Financials Ultrasector Profund 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 Equity has no effect on the direction of Financials Ultrasector i.e., Financials Ultrasector and Calvert Global go up and down completely randomly.

Pair Corralation between Financials Ultrasector and Calvert Global

Assuming the 90 days horizon Financials Ultrasector is expected to generate 1.01 times less return on investment than Calvert Global. In addition to that, Financials Ultrasector is 1.74 times more volatile than Calvert Global Equity. It trades about 0.18 of its total potential returns per unit of risk. Calvert Global Equity is currently generating about 0.31 per unit of volatility. If you would invest  1,610  in Calvert Global Equity on April 29, 2025 and sell it today you would earn a total of  237.00  from holding Calvert Global Equity or generate 14.72% return on investment over 90 days.

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

Financials Ultrasector Profund  vs.  Calvert Global Equity

Financials Ultrasector

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Financials Ultrasector Profund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Financials Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Calvert Global Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Equity are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Calvert Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Financials Ultrasector and Calvert Global

The main advantage of trading using opposite Financials Ultrasector and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financials Ultrasector 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 Financials Ultrasector Profund and Calvert 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.