Correlation Between Capital Management and Calvert Income
Can any of the company-specific risk be diversified away by investing in both Capital Management and Calvert Income 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 Capital Management and Calvert Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Management Mid Cap and Calvert Income Fund, you can compare the effects of market volatilities on Capital Management and Calvert Income 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 Capital Management with a short position of Calvert Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Management and Calvert Income.
Diversification Opportunities for Capital Management and Calvert Income
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Calvert is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Capital Management Mid Cap and Calvert Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Income and Capital Management 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 Capital Management Mid Cap are associated (or correlated) with Calvert Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Income has no effect on the direction of Capital Management i.e., Capital Management and Calvert Income go up and down completely randomly.
Pair Corralation between Capital Management and Calvert Income
Assuming the 90 days horizon Capital Management Mid Cap is expected to generate 3.98 times more return on investment than Calvert Income. However, Capital Management is 3.98 times more volatile than Calvert Income Fund. It trades about 0.13 of its potential returns per unit of risk. Calvert Income Fund is currently generating about 0.14 per unit of risk. If you would invest 2,482 in Capital Management Mid Cap on May 1, 2025 and sell it today you would earn a total of 188.00 from holding Capital Management Mid Cap or generate 7.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Capital Management Mid Cap vs. Calvert Income Fund
Performance |
Timeline |
Capital Management Mid |
Calvert Income |
Capital Management and Calvert Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capital Management and Calvert Income
The main advantage of trading using opposite Capital Management and Calvert Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Management position performs unexpectedly, Calvert Income 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 Income will offset losses from the drop in Calvert Income's long position.Capital Management vs. Target Retirement 2040 | Capital Management vs. Columbia Moderate Growth | Capital Management vs. Moderately Aggressive Balanced | Capital Management vs. Jpmorgan Smartretirement 2035 |
Calvert Income vs. Columbia International Value | Calvert Income vs. Calvert Moderate Allocation | Calvert Income vs. Calvert Developed Market | Calvert Income vs. Calvert International Responsible |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |