Correlation Between Capital Management and Calvert Small
Can any of the company-specific risk be diversified away by investing in both Capital Management and Calvert 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 Capital Management and Calvert Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Management Mid Cap and Calvert Small Cap, you can compare the effects of market volatilities on Capital Management and Calvert 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 Capital Management with a short position of Calvert Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Management and Calvert Small.
Diversification Opportunities for Capital Management and Calvert Small
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and Calvert is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Capital Management Mid Cap and Calvert Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Small Cap and Capital Management 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 Capital Management Mid Cap are associated (or correlated) with Calvert Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Small Cap has no effect on the direction of Capital Management i.e., Capital Management and Calvert Small go up and down completely randomly.
Pair Corralation between Capital Management and Calvert Small
Assuming the 90 days horizon Capital Management is expected to generate 3.19 times less return on investment than Calvert Small. But when comparing it to its historical volatility, Capital Management Mid Cap is 1.16 times less risky than Calvert Small. It trades about 0.02 of its potential returns per unit of risk. Calvert Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,788 in Calvert Small Cap on December 4, 2024 and sell it today you would earn a total of 593.00 from holding Calvert Small Cap or generate 21.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.25% |
| Values | Daily Returns |
Capital Management Mid Cap vs. Calvert Small Cap
Performance |
| Timeline |
| Capital Management Mid |
| Calvert Small Cap |
Capital Management and Calvert Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Management and Calvert Small
The main advantage of trading using opposite Capital Management and Calvert Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Management position performs unexpectedly, Calvert 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 Calvert Small will offset losses from the drop in Calvert Small's long position.| Capital Management vs. Rbc Emerging Markets | Capital Management vs. Templeton Developing Markets | Capital Management vs. Investec Emerging Markets | Capital Management vs. Jhancock Diversified Macro |
| Calvert Small vs. Calvert International Equity | Calvert Small vs. Calvert Equity Portfolio | Calvert Small vs. Calvert Capital Accumulation | Calvert Small vs. Calvert Large Cap |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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