Correlation Between Calvert Fund and Health Care

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

By analyzing existing cross correlation between Calvert Fund and Health Care Ultrasector, you can compare the effects of market volatilities on Calvert Fund and Health Care 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 Fund with a short position of Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Fund and Health Care.

Diversification Opportunities for Calvert Fund and Health Care

0.57

Correlation Coefficient

Calvert Fund  Health Care

Very weak diversification

The 3 months correlation between Calvert and Health is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Fund and Health Care Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Ultrasector and Calvert Fund 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 Fund are associated (or correlated) with Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Ultrasector has no effect on the direction of Calvert Fund i.e., Calvert Fund and Health Care go up and down completely randomly.

Pair Corralation between Calvert Fund and Health Care

Assuming the 90 days horizon Calvert Fund is expected to generate 1.18 times less return on investment than Health Care. But when comparing it to its historical volatility, Calvert Fund is 1.97 times less risky than Health Care. It trades about 0.13 of its potential returns per unit of risk. Health Care Ultrasector is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,063  in Health Care Ultrasector on May 27, 2025 and sell it today you would earn a total of  572.00  from holding Health Care Ultrasector or generate 6.31% return on investment over 90 days.

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

Calvert Fund   vs.  Health Care Ultrasector

Calvert Fund

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Health Care Ultrasector

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Health Care Ultrasector are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Health Care may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Calvert Fund and Health Care

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

The idea behind Calvert Fund and Health Care Ultrasector 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.