Correlation Between Calvert Large and Six Circles

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

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

Diversification Opportunities for Calvert Large and Six Circles

0.98

Correlation Coefficient

Calvert Large  Six Circles

Almost no diversification

The 3 months correlation between Calvert and Six is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Six Circles Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Unconstrained and Calvert Large 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 Large Cap are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Unconstrained has no effect on the direction of Calvert Large i.e., Calvert Large and Six Circles go up and down completely randomly.

Pair Corralation between Calvert Large and Six Circles

Assuming the 90 days horizon Calvert Large is expected to generate 1.39 times less return on investment than Six Circles. In addition to that, Calvert Large is 1.02 times more volatile than Six Circles Unconstrained. It trades about 0.22 of its total potential returns per unit of risk. Six Circles Unconstrained is currently generating about 0.31 per unit of volatility. If you would invest  1,650  in Six Circles Unconstrained on April 29, 2025 and sell it today you would earn a total of  263.00  from holding Six Circles Unconstrained or generate 15.94% return on investment over 90 days.

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

Calvert Large Cap  vs.  Six Circles Unconstrained

Calvert Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Large may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Six Circles Unconstrained

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Six Circles Unconstrained are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Six Circles showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Large and Six Circles

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

The idea behind Calvert Large Cap and Six Circles Unconstrained 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.