Correlation Between Calvert Large and Tributary Small/mid

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

Diversification Opportunities for Calvert Large and Tributary Small/mid

0.94

Correlation Coefficient

Calvert Large  Tributary Small/mid

Almost no diversification

The 3 months correlation between Calvert and Tributary is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Tributary Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tributary Smallmid Cap 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 Tributary Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tributary Smallmid Cap has no effect on the direction of Calvert Large i.e., Calvert Large and Tributary Small/mid go up and down completely randomly.

Pair Corralation between Calvert Large and Tributary Small/mid

Assuming the 90 days horizon Calvert Large Cap is expected to generate 0.7 times more return on investment than Tributary Small/mid. However, Calvert Large Cap is 1.43 times less risky than Tributary Small/mid. It trades about 0.31 of its potential returns per unit of risk. Tributary Smallmid Cap is currently generating about 0.14 per unit of risk. If you would invest  4,597  in Calvert Large Cap on April 28, 2025 and sell it today you would earn a total of  728.00  from holding Calvert Large Cap or generate 15.84% 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.  Tributary Smallmid Cap

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 24 (%) 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.

Tributary Smallmid Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tributary Smallmid Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady fundamental indicators, Tributary Small/mid may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Calvert Large and Tributary Small/mid

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

The idea behind Calvert Large Cap and Tributary Smallmid Cap 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.