Correlation Between Utilities Ultrasector and Calvert Global

Can any of the company-specific risk be diversified away by investing in both Utilities 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 Utilities 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 Utilities Ultrasector Profund and Calvert Global Energy, you can compare the effects of market volatilities on Utilities 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 Utilities Ultrasector with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utilities Ultrasector and Calvert Global.

Diversification Opportunities for Utilities Ultrasector and Calvert Global

0.81

Correlation Coefficient

Utilities Ultrasector  Calvert Global

Very poor diversification

The 3 months correlation between Utilities and Calvert is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Utilities Ultrasector Profund 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 Utilities 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 Utilities 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 Energy has no effect on the direction of Utilities Ultrasector i.e., Utilities Ultrasector and Calvert Global go up and down completely randomly.

Pair Corralation between Utilities Ultrasector and Calvert Global

Assuming the 90 days horizon Utilities Ultrasector Profund is expected to generate 1.72 times more return on investment than Calvert Global. However, Utilities Ultrasector is 1.72 times more volatile than Calvert Global Energy. It trades about 0.15 of its potential returns per unit of risk. Calvert Global Energy is currently generating about 0.25 per unit of risk. If you would invest  7,333  in Utilities Ultrasector Profund on May 11, 2025 and sell it today you would earn a total of  968.00  from holding Utilities Ultrasector Profund or generate 13.2% return on investment over 90 days.

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

Utilities Ultrasector Profund  vs.  Calvert Global Energy

Utilities Ultrasector

Risk-Adjusted Performance

Good

Over the last 90 days Utilities Ultrasector Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak forward indicators, Utilities Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Calvert Global Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unfluctuating forward indicators, Calvert Global may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Utilities Ultrasector and Calvert Global

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