Correlation Between Calvert Large and Columbia Seligman

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

Diversification Opportunities for Calvert Large and Columbia Seligman

0.98

Correlation Coefficient

Calvert Large  Columbia Seligman

Almost no diversification

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

Pair Corralation between Calvert Large and Columbia Seligman

Assuming the 90 days horizon Calvert Large is expected to generate 1.52 times less return on investment than Columbia Seligman. But when comparing it to its historical volatility, Calvert Large Cap is 1.35 times less risky than Columbia Seligman. It trades about 0.06 of its potential returns per unit of risk. Columbia Seligman Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,956  in Columbia Seligman Global on March 21, 2025 and sell it today you would earn a total of  586.00  from holding Columbia Seligman Global or generate 8.42% 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.  Columbia Seligman Global

Calvert Large Cap

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calvert Large may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Columbia Seligman Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Seligman Global are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Seligman may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Calvert Large and Columbia Seligman

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

The idea behind Calvert Large Cap and Columbia Seligman Global 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.