Correlation Between Calvert Moderate and Apexcm Small/mid

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

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

Diversification Opportunities for Calvert Moderate and Apexcm Small/mid

0.78

Correlation Coefficient

Calvert Moderate  Apexcm Small/mid

Poor diversification

The 3 months correlation between Calvert and Apexcm is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Apexcm Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apexcm Smallmid Cap and Calvert Moderate 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 Moderate Allocation are associated (or correlated) with Apexcm 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 Apexcm Smallmid Cap has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Apexcm Small/mid go up and down completely randomly.

Pair Corralation between Calvert Moderate and Apexcm Small/mid

Assuming the 90 days horizon Calvert Moderate is expected to generate 1.71 times less return on investment than Apexcm Small/mid. But when comparing it to its historical volatility, Calvert Moderate Allocation is 1.95 times less risky than Apexcm Small/mid. It trades about 0.04 of its potential returns per unit of risk. Apexcm Smallmid Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,539  in Apexcm Smallmid Cap on October 24, 2024 and sell it today you would earn a total of  262.00  from holding Apexcm Smallmid Cap or generate 17.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Calvert Moderate Allocation  vs.  Apexcm Smallmid Cap

Calvert Moderate All

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Moderate Allocation are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Apexcm Smallmid Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apexcm Smallmid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Apexcm Small/mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Moderate and Apexcm Small/mid

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

The idea behind Calvert Moderate Allocation and Apexcm 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.