Correlation Between Calvert Emerging and Columbia Small

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

By analyzing existing cross correlation between Calvert Emerging Markets and Columbia Small Cap, you can compare the effects of market volatilities on Calvert Emerging and Columbia Small 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 Emerging with a short position of Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Emerging and Columbia Small.

Diversification Opportunities for Calvert Emerging and Columbia Small

0.0

Correlation Coefficient

Calvert Emerging  Columbia Small

Pay attention - limited upside

The 3 months correlation between Calvert and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap and Calvert Emerging 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 Emerging Markets are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Columbia Small go up and down completely randomly.

Pair Corralation between Calvert Emerging and Columbia Small

If you would invest  1,672  in Calvert Emerging Markets on February 20, 2024 and sell it today you would earn a total of  110.00  from holding Calvert Emerging Markets or generate 6.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.38%
Values	Daily Returns

Calvert Emerging Markets  vs.  Columbia Small Cap

Calvert Emerging Markets

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Emerging Markets are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Emerging may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Columbia Small Cap

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Columbia Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Columbia Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Emerging and Columbia Small

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

The idea behind Calvert Emerging Markets and Columbia Small Cap 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.