Correlation Between Easterly Snow and Calvert Aggressive

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

Diversification Opportunities for Easterly Snow and Calvert Aggressive

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Easterly and Calvert is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Easterly Snow Small and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and Easterly Snow 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 Easterly Snow Small 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 Easterly Snow i.e., Easterly Snow and Calvert Aggressive go up and down completely randomly.

Pair Corralation between Easterly Snow and Calvert Aggressive

Assuming the 90 days horizon Easterly Snow Small is expected to under-perform the Calvert Aggressive. In addition to that, Easterly Snow is 2.25 times more volatile than Calvert Aggressive Allocation. It trades about -0.08 of its total potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.17 per unit of volatility. If you would invest  2,791  in Calvert Aggressive Allocation on September 15, 2024 and sell it today you would earn a total of  42.00  from holding Calvert Aggressive Allocation or generate 1.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Easterly Snow Small  vs.  Calvert Aggressive Allocation

 Performance 
       Timeline  
Easterly Snow Small 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Easterly Snow Small are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Easterly Snow may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Calvert Aggressive 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Aggressive Allocation are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Easterly Snow and Calvert Aggressive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Easterly Snow and Calvert Aggressive

The main advantage of trading using opposite Easterly Snow and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easterly Snow 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 Easterly Snow Small 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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