Correlation Between Calvert Aggressive and Bmo Large-cap

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

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

Diversification Opportunities for Calvert Aggressive and Bmo Large-cap

0.46

Correlation Coefficient

Calvert Aggressive  Bmo Large-cap

Very weak diversification

The 3 months correlation between Calvert and Bmo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Aggressive Allocation and Bmo Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bmo Large Cap and Calvert Aggressive 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 Aggressive Allocation are associated (or correlated) with Bmo Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bmo Large Cap has no effect on the direction of Calvert Aggressive i.e., Calvert Aggressive and Bmo Large-cap go up and down completely randomly.

Pair Corralation between Calvert Aggressive and Bmo Large-cap

Assuming the 90 days horizon Calvert Aggressive is expected to generate 1.46 times less return on investment than Bmo Large-cap. But when comparing it to its historical volatility, Calvert Aggressive Allocation is 1.41 times less risky than Bmo Large-cap. It trades about 0.15 of its potential returns per unit of risk. Bmo Large Cap Growth is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,111  in Bmo Large Cap Growth on May 17, 2025 and sell it today you would earn a total of  165.00  from holding Bmo Large Cap Growth or generate 7.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.16%
Values	Daily Returns

Calvert Aggressive Allocation  vs.  Bmo Large Cap Growth

Calvert Aggressive

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Aggressive Allocation are ranked lower than 11 (%) 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.

Bmo Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bmo Large Cap Growth are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Bmo Large-cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Calvert Aggressive and Bmo Large-cap

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

The idea behind Calvert Aggressive Allocation and Bmo Large Cap Growth 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.