Correlation Between Calvert Conservative and Us Small

Can any of the company-specific risk be diversified away by investing in both Calvert Conservative and Us 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 Calvert Conservative and Us Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calvert Conservative Allocation and Us Small Cap, you can compare the effects of market volatilities on Calvert Conservative and Us 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 Calvert Conservative with a short position of Us Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and Us Small.

Diversification Opportunities for Calvert Conservative and Us Small

0.96

Correlation Coefficient

Calvert Conservative  Us Small

Almost no diversification

The 3 months correlation between Calvert and DFSTX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Us Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Small Cap and Calvert Conservative 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 Conservative Allocation are associated (or correlated) with Us Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Small Cap has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Us Small go up and down completely randomly.

Pair Corralation between Calvert Conservative and Us Small

Assuming the 90 days horizon Calvert Conservative is expected to generate 2.71 times less return on investment than Us Small. But when comparing it to its historical volatility, Calvert Conservative Allocation is 3.43 times less risky than Us Small. It trades about 0.24 of its potential returns per unit of risk. Us Small Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  4,384  in Us Small Cap on April 29, 2025 and sell it today you would earn a total of  586.00  from holding Us Small Cap or generate 13.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Calvert Conservative Allocatio  vs.  Us Small Cap

Calvert Conservative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Conservative Allocation are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Us Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us Small Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Us Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Conservative and Us Small

The main advantage of trading using opposite Calvert Conservative and Us Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Conservative position performs unexpectedly, Us 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 Us Small will offset losses from the drop in Us Small's long position.

The idea behind Calvert Conservative Allocation and Us Small Cap 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.