Correlation Between Calvert Aggressive and Largecap
Can any of the company-specific risk be diversified away by investing in both Calvert Aggressive and Largecap 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 Aggressive and Largecap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Aggressive Allocation and Largecap Sp 500, you can compare the effects of market volatilities on Calvert Aggressive and Largecap 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 Aggressive with a short position of Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Aggressive and Largecap.
Diversification Opportunities for Calvert Aggressive and Largecap
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and Largecap is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and Largecap Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Largecap Sp 500 and Calvert Aggressive 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 Aggressive Allocation are associated (or correlated) with Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Largecap Sp 500 has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and Largecap go up and down completely randomly.
Pair Corralation between Calvert Aggressive and Largecap
Assuming the 90 days horizon Calvert Aggressive is expected to generate 1.22 times less return on investment than Largecap. But when comparing it to its historical volatility, Calvert Aggressive Allocation is 1.2 times less risky than Largecap. It trades about 0.17 of its potential returns per unit of risk. Largecap Sp 500 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,937 in Largecap Sp 500 on September 15, 2024 and sell it today you would earn a total of 54.00 from holding Largecap Sp 500 or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Aggressive Allocation vs. Largecap Sp 500
Performance |
| Timeline |
| Calvert Aggressive |
| Largecap Sp 500 |
Calvert Aggressive and Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Aggressive and Largecap
The main advantage of trading using opposite Calvert Aggressive and Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Aggressive position performs unexpectedly, Largecap 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 Largecap will offset losses from the drop in Largecap's long position.| Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Short Duration | Calvert Aggressive vs. Calvert International Responsible |
| Largecap vs. Strategic Asset Management | Largecap vs. Strategic Asset Management | Largecap vs. Strategic Asset Management | Largecap vs. Strategic Asset Management |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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