Correlation Between Blackrock Small/mid and Calvert Us

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

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

Diversification Opportunities for Blackrock Small/mid and Calvert Us

0.96

Correlation Coefficient

Blackrock Small/mid  Calvert Us

Almost no diversification

The 3 months correlation between Blackrock and Calvert is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Smallmid Cap and Calvert Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Mid Cap and Blackrock Small/mid 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 Blackrock Smallmid Cap are associated (or correlated) with Calvert Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Mid Cap has no effect on the direction of Blackrock Small/mid i.e., Blackrock Small/mid and Calvert Us go up and down completely randomly.

Pair Corralation between Blackrock Small/mid and Calvert Us

Assuming the 90 days horizon Blackrock Smallmid Cap is expected to under-perform the Calvert Us. In addition to that, Blackrock Small/mid is 1.22 times more volatile than Calvert Mid Cap. It trades about -0.1 of its total potential returns per unit of risk. Calvert Mid Cap is currently generating about -0.08 per unit of volatility. If you would invest  4,119  in Calvert Mid Cap on December 31, 2024 and sell it today you would lose (195.00) from holding Calvert Mid Cap or give up 4.73% of portfolio value over 90 days.

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

Blackrock Smallmid Cap  vs.  Calvert Mid Cap

Blackrock Smallmid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Calvert Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calvert Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Calvert Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Small/mid and Calvert Us

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

The idea behind Blackrock Smallmid Cap and Calvert Mid 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.