Correlation Between Gmo Core and Calvert Long

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

By analyzing existing cross correlation between Gmo E Plus and Calvert Long Term Income, you can compare the effects of market volatilities on Gmo Core and Calvert Long 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 Gmo Core with a short position of Calvert Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Core and Calvert Long.

Diversification Opportunities for Gmo Core and Calvert Long

0.99

Correlation Coefficient

Gmo Core  Calvert Long

No risk reduction

The 3 months correlation between Gmo and Calvert is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Gmo E Plus and Calvert Long Term Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Long Term and Gmo Core 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 Gmo E Plus are associated (or correlated) with Calvert Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Long Term has no effect on the direction of Gmo Core i.e., Gmo Core and Calvert Long go up and down completely randomly.

Pair Corralation between Gmo Core and Calvert Long

Assuming the 90 days horizon Gmo E Plus is expected to generate 1.06 times more return on investment than Calvert Long. However, Gmo Core is 1.06 times more volatile than Calvert Long Term Income. It trades about 0.12 of its potential returns per unit of risk. Calvert Long Term Income is currently generating about 0.1 per unit of risk. If you would invest  1,749  in Gmo E Plus on July 1, 2025 and sell it today you would earn a total of  32.00  from holding Gmo E Plus or generate 1.83% return on investment over 90 days.

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

Gmo E Plus  vs.  Calvert Long Term Income

Gmo E Plus

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo E Plus are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Gmo Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Long Term

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Long Term Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Long is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gmo Core and Calvert Long

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

The idea behind Gmo E Plus and Calvert Long Term Income 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..