Correlation Between Calvert Large and Equity Index

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

Diversification Opportunities for Calvert Large and Equity Index

0.66

Correlation Coefficient

Calvert Large  Equity Index

Poor diversification

The 3 months correlation between Calvert and Equity is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Equity Index Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Index Institu 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 Equity Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Index Institu has no effect on the direction of Calvert Large i.e., Calvert Large and Equity Index go up and down completely randomly.

Pair Corralation between Calvert Large and Equity Index

Assuming the 90 days horizon Calvert Large Cap is expected to under-perform the Equity Index. In addition to that, Calvert Large is 1.24 times more volatile than Equity Index Institutional. It trades about -0.04 of its total potential returns per unit of risk. Equity Index Institutional is currently generating about 0.05 per unit of volatility. If you would invest  6,580  in Equity Index Institutional on September 20, 2025 and sell it today you would earn a total of  149.00  from holding Equity Index Institutional or generate 2.26% return on investment over 90 days.

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

Calvert Large Cap  vs.  Equity Index Institutional

Calvert Large Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Calvert Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Calvert Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Equity Index Institu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Index Institutional are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Equity Index 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 Large and Equity Index

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

The idea behind Calvert Large Cap and Equity Index Institutional 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.