Correlation Between Calvert Conservative and Capital Management

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

Diversification Opportunities for Calvert Conservative and Capital Management

0.92

Correlation Coefficient

Calvert Conservative  Capital Management

Almost no diversification

The 3 months correlation between Calvert and Capital is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Capital Management Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Management 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 Capital Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Management Mid has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Capital Management go up and down completely randomly.

Pair Corralation between Calvert Conservative and Capital Management

Assuming the 90 days horizon Calvert Conservative Allocation is expected to generate about the same return on investment as Capital Management Mid Cap. But, Calvert Conservative Allocation is 2.18 times less risky than Capital Management. It trades about 0.31 of its potential returns per unit of risk. Capital Management Mid Cap is currently generating about 0.14 per unit of risk. If you would invest  1,111  in Capital Management Mid Cap on April 22, 2025 and sell it today you would earn a total of  73.00  from holding Capital Management Mid Cap or generate 6.57% 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.  Capital Management Mid 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 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Conservative may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Capital Management Mid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Management Mid Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Capital Management may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Calvert Conservative and Capital Management

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

The idea behind Calvert Conservative Allocation and Capital Management 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.