Correlation Between Calvert Moderate and Vanguard Small-cap
Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Vanguard Small-cap 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 Moderate and Vanguard Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Moderate Allocation and Vanguard Small Cap Growth, you can compare the effects of market volatilities on Calvert Moderate and Vanguard Small-cap 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 Moderate with a short position of Vanguard Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Vanguard Small-cap.
Diversification Opportunities for Calvert Moderate and Vanguard Small-cap
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and Vanguard is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Vanguard Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap and Calvert Moderate 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 Moderate Allocation are associated (or correlated) with Vanguard Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Vanguard Small-cap go up and down completely randomly.
Pair Corralation between Calvert Moderate and Vanguard Small-cap
Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 0.45 times more return on investment than Vanguard Small-cap. However, Calvert Moderate Allocation is 2.2 times less risky than Vanguard Small-cap. It trades about 0.08 of its potential returns per unit of risk. Vanguard Small Cap Growth is currently generating about -0.05 per unit of risk. If you would invest 2,035 in Calvert Moderate Allocation on November 30, 2024 and sell it today you would earn a total of 30.00 from holding Calvert Moderate Allocation or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
Calvert Moderate Allocation vs. Vanguard Small Cap Growth
Performance |
| Timeline |
| Calvert Moderate All |
| Vanguard Small Cap |
Calvert Moderate and Vanguard Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Moderate and Vanguard Small-cap
The main advantage of trading using opposite Calvert Moderate and Vanguard Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Moderate position performs unexpectedly, Vanguard Small-cap 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 Vanguard Small-cap will offset losses from the drop in Vanguard Small-cap's long position.| Calvert Moderate vs. Lord Abbett Inflation | Calvert Moderate vs. Ab Bond Inflation | Calvert Moderate vs. Ab Bond Inflation | Calvert Moderate vs. Tiaa Cref Inflation Link |
| Vanguard Small-cap vs. Jhancock Diversified Macro | Vanguard Small-cap vs. Lord Abbett Diversified | Vanguard Small-cap vs. Global Diversified Income | Vanguard Small-cap vs. Aqr Diversified Arbitrage |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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