Correlation Between Amcap Fund and Calvert Large

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

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

Diversification Opportunities for Amcap Fund and Calvert Large

-0.55

Correlation Coefficient

Amcap Fund  Calvert Large

Excellent diversification

The 3 months correlation between Amcap and Calvert is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and Calvert Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large Cap and Amcap Fund 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 Amcap Fund Class are associated (or correlated) with Calvert Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Amcap Fund i.e., Amcap Fund and Calvert Large go up and down completely randomly.

Pair Corralation between Amcap Fund and Calvert Large

Assuming the 90 days horizon Amcap Fund Class is expected to under-perform the Calvert Large. In addition to that, Amcap Fund is 12.29 times more volatile than Calvert Large Cap. It trades about -0.09 of its total potential returns per unit of risk. Calvert Large Cap is currently generating about 0.25 per unit of volatility. If you would invest  963.00  in Calvert Large Cap on December 21, 2024 and sell it today you would earn a total of  13.00  from holding Calvert Large Cap or generate 1.35% return on investment over 90 days.

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

Amcap Fund Class  vs.  Calvert Large Cap

Amcap Fund Class

Risk-Adjusted Performance

Very Weak

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

Calvert Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap are ranked lower than 19 (%) 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.

Pair Trading with Amcap Fund and Calvert Large

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

The idea behind Amcap Fund Class and Calvert Large 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.