Correlation Between Calvert Moderate and Equinox Chesapeake

Can any of the company-specific risk be diversified away by investing in both Calvert Moderate and Equinox Chesapeake 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 Equinox Chesapeake 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 Equinox Chesapeake Strategy, you can compare the effects of market volatilities on Calvert Moderate and Equinox Chesapeake 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 Equinox Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Equinox Chesapeake.

Diversification Opportunities for Calvert Moderate and Equinox Chesapeake

0.62

Correlation Coefficient

Calvert Moderate  Equinox Chesapeake

Poor diversification

The 3 months correlation between Calvert and Equinox is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Equinox Chesapeake Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Chesapeake 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 Equinox Chesapeake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Chesapeake has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Equinox Chesapeake go up and down completely randomly.

Pair Corralation between Calvert Moderate and Equinox Chesapeake

Assuming the 90 days horizon Calvert Moderate Allocation is expected to generate 0.77 times more return on investment than Equinox Chesapeake. However, Calvert Moderate Allocation is 1.31 times less risky than Equinox Chesapeake. It trades about 0.03 of its potential returns per unit of risk. Equinox Chesapeake Strategy is currently generating about -0.03 per unit of risk. If you would invest  1,867  in Calvert Moderate Allocation on October 5, 2024 and sell it today you would earn a total of  165.00  from holding Calvert Moderate Allocation or generate 8.84% return on investment over 90 days.

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

Calvert Moderate Allocation  vs.  Equinox Chesapeake Strategy

Calvert Moderate All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Moderate Allocation has generated negative risk-adjusted returns adding no value to fund investors. 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.

Equinox Chesapeake

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equinox Chesapeake Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Equinox Chesapeake 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 Equinox Chesapeake

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

The idea behind Calvert Moderate Allocation and Equinox Chesapeake Strategy 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.