Correlation Between Vest Large and Calvert Large

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

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

Diversification Opportunities for Vest Large and Calvert Large

1.0

Correlation Coefficient

Vest Large  Calvert Large

No risk reduction

The 3 months correlation between Vest and Calvert is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vest Large Cap and Calvert Large Cap E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large Cap and Vest 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 Vest Large Cap are associated (or correlated) with Calvert Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Vest Large i.e., Vest Large and Calvert Large go up and down completely randomly.

Pair Corralation between Vest Large and Calvert Large

Assuming the 90 days horizon Vest Large is expected to generate 1.96 times less return on investment than Calvert Large. But when comparing it to its historical volatility, Vest Large Cap is 2.03 times less risky than Calvert Large. It trades about 0.32 of its potential returns per unit of risk. Calvert Large Cap E is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  4,754  in Calvert Large Cap E on April 29, 2025 and sell it today you would earn a total of  743.00  from holding Calvert Large Cap E or generate 15.63% return on investment over 90 days.

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

Vest Large Cap  vs.  Calvert Large Cap E

Vest Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vest Large Cap are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vest Large may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Calvert Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap E 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.

Pair Trading with Vest Large and Calvert Large

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

The idea behind Vest Large Cap and Calvert Large Cap E 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..