Correlation Between Ab Small and Calvert Aggressive

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Can any of the company-specific risk be diversified away by investing in both Ab Small and Calvert Aggressive 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 Ab Small and Calvert Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Calvert Aggressive Allocation, you can compare the effects of market volatilities on Ab Small and Calvert Aggressive 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 Ab Small with a short position of Calvert Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Calvert Aggressive.

Diversification Opportunities for Ab Small and Calvert Aggressive

SCYVXCalvertDiversified AwaySCYVXCalvertDiversified Away100%
0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between SCYVX and Calvert is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and Ab 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 Ab Small Cap are associated (or correlated) with Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of Ab Small i.e., Ab Small and Calvert Aggressive go up and down completely randomly.

Pair Corralation between Ab Small and Calvert Aggressive

Assuming the 90 days horizon Ab Small Cap is expected to under-perform the Calvert Aggressive. In addition to that, Ab Small is 1.75 times more volatile than Calvert Aggressive Allocation. It trades about -0.21 of its total potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.01 per unit of volatility. If you would invest  2,234  in Calvert Aggressive Allocation on November 26, 2024 and sell it today you would earn a total of  2.00  from holding Calvert Aggressive Allocation or generate 0.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ab Small Cap  vs.  Calvert Aggressive Allocation

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -8-6-4-2024
JavaScript chart by amCharts 3.21.15SCYVX CAACX
       Timeline  
Ab Small Cap 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ab Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb14.51515.51616.5
Calvert Aggressive 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Calvert Aggressive Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Calvert Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb21.621.82222.222.422.622.823

Ab Small and Calvert Aggressive Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.84-1.4-0.96-0.52-0.08370.270.711.151.592.03 0.20.40.60.8
JavaScript chart by amCharts 3.21.15SCYVX CAACX
       Returns  

Pair Trading with Ab Small and Calvert Aggressive

The main advantage of trading using opposite Ab Small and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Calvert Aggressive 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 Aggressive will offset losses from the drop in Calvert Aggressive's long position.
The idea behind Ab Small Cap and Calvert Aggressive Allocation 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.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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