Correlation Between Calvert Small and Crawford Dividend

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

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

Diversification Opportunities for Calvert Small and Crawford Dividend

0.98

Correlation Coefficient

Calvert Small  Crawford Dividend

Almost no diversification

The 3 months correlation between Calvert and Crawford is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Small Cap and Crawford Dividend Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford Dividend and Calvert Small 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 Small Cap are associated (or correlated) with Crawford Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford Dividend has no effect on the direction of Calvert Small i.e., Calvert Small and Crawford Dividend go up and down completely randomly.

Pair Corralation between Calvert Small and Crawford Dividend

Assuming the 90 days horizon Calvert Small is expected to generate 1.11 times less return on investment than Crawford Dividend. But when comparing it to its historical volatility, Calvert Small Cap is 1.08 times less risky than Crawford Dividend. It trades about 0.07 of its potential returns per unit of risk. Crawford Dividend Opportunity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,512  in Crawford Dividend Opportunity on September 23, 2024 and sell it today you would earn a total of  457.00  from holding Crawford Dividend Opportunity or generate 10.13% return on investment over 90 days.

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

Calvert Small Cap  vs.  Crawford Dividend Opportunity

Calvert Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Crawford Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Dividend Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Crawford Dividend 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 Small and Crawford Dividend

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

The idea behind Calvert Small Cap and Crawford Dividend Opportunity 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.