Correlation Between Jacob Micro and Calvert Smallmid

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

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

Diversification Opportunities for Jacob Micro and Calvert Smallmid

0.71

Correlation Coefficient

Jacob Micro  Calvert Smallmid

Poor diversification

The 3 months correlation between Jacob and Calvert is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Micro Cap and Calvert Smallmid Cap A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Smallmid Cap and Jacob Micro 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 Jacob Micro Cap are associated (or correlated) with Calvert Smallmid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Smallmid Cap has no effect on the direction of Jacob Micro i.e., Jacob Micro and Calvert Smallmid go up and down completely randomly.

Pair Corralation between Jacob Micro and Calvert Smallmid

Assuming the 90 days horizon Jacob Micro Cap is expected to generate 1.61 times more return on investment than Calvert Smallmid. However, Jacob Micro is 1.61 times more volatile than Calvert Smallmid Cap A. It trades about 0.19 of its potential returns per unit of risk. Calvert Smallmid Cap A is currently generating about 0.09 per unit of risk. If you would invest  2,309  in Jacob Micro Cap on May 4, 2025 and sell it today you would earn a total of  446.00  from holding Jacob Micro Cap or generate 19.32% return on investment over 90 days.

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

Jacob Micro Cap  vs.  Calvert Smallmid Cap A

Jacob Micro Cap

Risk-Adjusted Performance

Good

Over the last 90 days Jacob Micro Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak technical and fundamental indicators, Jacob Micro showed solid returns over the last few months and may actually be approaching a breakup point.

Calvert Smallmid Cap

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Smallmid Cap A are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Smallmid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jacob Micro and Calvert Smallmid

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

The idea behind Jacob Micro Cap and Calvert Smallmid Cap A 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.