Correlation Between Calvert Equity and Calvert Unconstrained

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

By analyzing existing cross correlation between Calvert Equity Portfolio and Calvert Unconstrained Bond, you can compare the effects of market volatilities on Calvert Equity and Calvert Unconstrained 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 Equity with a short position of Calvert Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Equity and Calvert Unconstrained.

Diversification Opportunities for Calvert Equity and Calvert Unconstrained

0.87

Correlation Coefficient

Calvert Equity  Calvert Unconstrained

Very poor diversification

The 3 months correlation between Calvert and Calvert is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Equity Portfolio and Calvert Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Unconstrained and Calvert Equity 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 Equity Portfolio are associated (or correlated) with Calvert Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Unconstrained has no effect on the direction of Calvert Equity i.e., Calvert Equity and Calvert Unconstrained go up and down completely randomly.

Pair Corralation between Calvert Equity and Calvert Unconstrained

Assuming the 90 days horizon Calvert Equity Portfolio is expected to generate 4.76 times more return on investment than Calvert Unconstrained. However, Calvert Equity is 4.76 times more volatile than Calvert Unconstrained Bond. It trades about 0.24 of its potential returns per unit of risk. Calvert Unconstrained Bond is currently generating about 0.28 per unit of risk. If you would invest  8,588  in Calvert Equity Portfolio on April 21, 2025 and sell it today you would earn a total of  1,118  from holding Calvert Equity Portfolio or generate 13.02% return on investment over 90 days.

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

Calvert Equity Portfolio  vs.  Calvert Unconstrained Bond

Calvert Equity Portfolio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Equity Portfolio are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Equity may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Calvert Unconstrained

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Unconstrained Bond are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Unconstrained 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 Equity and Calvert Unconstrained

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

The idea behind Calvert Equity Portfolio and Calvert Unconstrained Bond 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.