Correlation Between Calvert Us and Blackrock Small/mid

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

Diversification Opportunities for Calvert Us and Blackrock Small/mid

0.98

Correlation Coefficient

Calvert Us  Blackrock Small/mid

Almost no diversification

The 3 months correlation between Calvert and Blackrock is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Blackrock Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Smallmid Cap and Calvert Us 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 Blackrock 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 Blackrock Smallmid Cap has no effect on the direction of Calvert Us i.e., Calvert Us and Blackrock Small/mid go up and down completely randomly.

Pair Corralation between Calvert Us and Blackrock Small/mid

Assuming the 90 days horizon Calvert Us is expected to generate 1.41 times less return on investment than Blackrock Small/mid. But when comparing it to its historical volatility, Calvert Large Cap is 1.36 times less risky than Blackrock Small/mid. It trades about 0.19 of its potential returns per unit of risk. Blackrock Smallmid Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,621  in Blackrock Smallmid Cap on September 3, 2024 and sell it today you would earn a total of  218.00  from holding Blackrock Smallmid Cap or generate 13.45% 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.  Blackrock Smallmid Cap

Calvert Large Cap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Us may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blackrock Smallmid Cap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Smallmid Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Blackrock Small/mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calvert Us and Blackrock Small/mid

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

The idea behind Calvert Large Cap and Blackrock 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.