Correlation Between Microsoft and Calvert Aggressive

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

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

Diversification Opportunities for Microsoft and Calvert Aggressive

0.98

Correlation Coefficient

Microsoft  Calvert Aggressive

Almost no diversification

The 3 months correlation between Microsoft and Calvert is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive and Microsoft 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 Microsoft are associated (or correlated) with Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of Microsoft i.e., Microsoft and Calvert Aggressive go up and down completely randomly.

Pair Corralation between Microsoft and Calvert Aggressive

Given the investment horizon of 90 days Microsoft is expected to generate 2.07 times more return on investment than Calvert Aggressive. However, Microsoft is 2.07 times more volatile than Calvert Aggressive Allocation. It trades about 0.41 of its potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.3 per unit of risk. If you would invest  37,370  in Microsoft on April 23, 2025 and sell it today you would earn a total of  13,636  from holding Microsoft or generate 36.49% return on investment over 90 days.

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

Microsoft  vs.  Calvert Aggressive Allocation

Microsoft

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Calvert Aggressive

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Aggressive Allocation are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Aggressive may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Microsoft and Calvert Aggressive

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

The idea behind Microsoft and Calvert Aggressive Allocation 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.