Correlation Between Calvert Conservative and Optimum Small

Can any of the company-specific risk be diversified away by investing in both Calvert Conservative and Optimum 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 Optimum 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 Optimum Small Mid Cap, you can compare the effects of market volatilities on Calvert Conservative and Optimum 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 Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and Optimum Small.

Diversification Opportunities for Calvert Conservative and Optimum Small

0.88

Correlation Coefficient

Calvert Conservative  Optimum Small

Very poor diversification

The 3 months correlation between Calvert and Optimum is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid 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 Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Optimum Small go up and down completely randomly.

Pair Corralation between Calvert Conservative and Optimum Small

Assuming the 90 days horizon Calvert Conservative Allocation is expected to generate 0.32 times more return on investment than Optimum Small. However, Calvert Conservative Allocation is 3.11 times less risky than Optimum Small. It trades about 0.19 of its potential returns per unit of risk. Optimum Small Mid Cap is currently generating about 0.03 per unit of risk. If you would invest  1,788  in Calvert Conservative Allocation on May 13, 2025 and sell it today you would earn a total of  69.00  from holding Calvert Conservative Allocation or generate 3.86% return on investment over 90 days.

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

Calvert Conservative Allocatio  vs.  Optimum Small Mid Cap

Calvert Conservative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Conservative Allocation are ranked lower than 15 (%) 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.

Optimum Small Mid

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Optimum Small Mid Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Optimum Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Conservative and Optimum Small

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

The idea behind Calvert Conservative Allocation and Optimum Small Mid 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.