Correlation Between Calvert Small and Walden Midcap
Can any of the company-specific risk be diversified away by investing in both Calvert Small and Walden Midcap 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 Small and Walden Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Small Cap and Walden Midcap Fund, you can compare the effects of market volatilities on Calvert Small and Walden Midcap 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 Small with a short position of Walden Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Small and Walden Midcap.
Diversification Opportunities for Calvert Small and Walden Midcap
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calvert and Walden is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Small Cap and Walden Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Midcap and Calvert Small 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 Small Cap are associated (or correlated) with Walden Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Midcap has no effect on the direction of Calvert Small i.e., Calvert Small and Walden Midcap go up and down completely randomly.
Pair Corralation between Calvert Small and Walden Midcap
Assuming the 90 days horizon Calvert Small Cap is expected to generate 1.8 times more return on investment than Walden Midcap. However, Calvert Small is 1.8 times more volatile than Walden Midcap Fund. It trades about 0.16 of its potential returns per unit of risk. Walden Midcap Fund is currently generating about 0.26 per unit of risk. If you would invest 3,380 in Calvert Small Cap on August 24, 2024 and sell it today you would earn a total of 170.00 from holding Calvert Small Cap or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Small Cap vs. Walden Midcap Fund
Performance |
| Timeline |
| Calvert Small Cap |
| Walden Midcap |
Calvert Small and Walden Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Small and Walden Midcap
The main advantage of trading using opposite Calvert Small and Walden Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Small position performs unexpectedly, Walden Midcap 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 Walden Midcap will offset losses from the drop in Walden Midcap's long position.| Calvert Small vs. Calvert International Equity | Calvert Small vs. Calvert Equity Portfolio | Calvert Small vs. Calvert Capital Accumulation | Calvert Small vs. Calvert Large Cap |
| Walden Midcap vs. Boston Trust Midcap | Walden Midcap vs. Walden Equity Fund | Walden Midcap vs. Mid Cap Value | Walden Midcap vs. Blackrock Total Stock |
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.
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