Correlation Between Calvert Large and Thornburg New

Can any of the company-specific risk be diversified away by investing in both Calvert Large and Thornburg New 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 Large and Thornburg New 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 Thornburg New Mexico, you can compare the effects of market volatilities on Calvert Large and Thornburg New 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 Large with a short position of Thornburg New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Large and Thornburg New.

Diversification Opportunities for Calvert Large and Thornburg New

0.08

Correlation Coefficient

Calvert Large  Thornburg New

Significant diversification

The 3 months correlation between Calvert and Thornburg is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Thornburg New Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg New Mexico and Calvert Large 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 Thornburg New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg New Mexico has no effect on the direction of Calvert Large i.e., Calvert Large and Thornburg New go up and down completely randomly.

Pair Corralation between Calvert Large and Thornburg New

Assuming the 90 days horizon Calvert Large Cap is expected to generate 0.64 times more return on investment than Thornburg New. However, Calvert Large Cap is 1.55 times less risky than Thornburg New. It trades about 0.22 of its potential returns per unit of risk. Thornburg New Mexico is currently generating about 0.04 per unit of risk. If you would invest  878.00  in Calvert Large Cap on October 26, 2024 and sell it today you would earn a total of  96.00  from holding Calvert Large Cap or generate 10.93% return on investment over 90 days.

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

Calvert Large Cap  vs.  Thornburg New Mexico

Calvert Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Calvert Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thornburg New Mexico

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg New Mexico are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Thornburg New 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 Large and Thornburg New

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

The idea behind Calvert Large Cap and Thornburg New Mexico 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.