Correlation Between Smallcap Fund and Calvert Global

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

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

Diversification Opportunities for Smallcap Fund and Calvert Global

0.94

Correlation Coefficient

Smallcap Fund  Calvert Global

Almost no diversification

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

Pair Corralation between Smallcap Fund and Calvert Global

Assuming the 90 days horizon Smallcap Fund is expected to generate 1.07 times less return on investment than Calvert Global. In addition to that, Smallcap Fund is 1.07 times more volatile than Calvert Global Energy. It trades about 0.24 of its total potential returns per unit of risk. Calvert Global Energy is currently generating about 0.27 per unit of volatility. If you would invest  1,136  in Calvert Global Energy on May 25, 2025 and sell it today you would earn a total of  170.00  from holding Calvert Global Energy or generate 14.96% return on investment over 90 days.

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

Smallcap Fund Fka  vs.  Calvert Global Energy

Smallcap Fund Fka

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Smallcap Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Calvert Global Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Global Energy are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Calvert Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smallcap Fund and Calvert Global

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

The idea behind Smallcap Fund Fka and Calvert Global Energy 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.