Correlation Between Calvert Large and Calvert Moderate

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

Diversification Opportunities for Calvert Large and Calvert Moderate

0.98

Correlation Coefficient

Calvert Large  Calvert Moderate

Almost no diversification

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

Pair Corralation between Calvert Large and Calvert Moderate

Assuming the 90 days horizon Calvert Large Cap is expected to generate 1.83 times more return on investment than Calvert Moderate. However, Calvert Large is 1.83 times more volatile than Calvert Moderate Allocation. It trades about 0.3 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.29 per unit of risk. If you would invest  6,119  in Calvert Large Cap on April 26, 2025 and sell it today you would earn a total of  1,031  from holding Calvert Large Cap or generate 16.85% 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.  Calvert Moderate Allocation

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 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Large showed solid returns over the last few months and may actually be approaching a breakup point.

Calvert Moderate All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Moderate Allocation are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Moderate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Calvert Large and Calvert Moderate

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

The idea behind Calvert Large Cap and Calvert Moderate Allocation 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 Transaction History module to view history of all your transactions and understand their impact on performance.