Correlation Between Yorktown Small-cap and Calvert Moderate

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

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

Diversification Opportunities for Yorktown Small-cap and Calvert Moderate

0.79

Correlation Coefficient

Yorktown Small-cap  Calvert Moderate

Poor diversification

The 3 months correlation between Yorktown and Calvert is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Yorktown Small Cap Fund and Calvert Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Moderate All and Yorktown Small-cap 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 Yorktown Small Cap Fund are associated (or correlated) with Calvert Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Moderate All has no effect on the direction of Yorktown Small-cap i.e., Yorktown Small-cap and Calvert Moderate go up and down completely randomly.

Pair Corralation between Yorktown Small-cap and Calvert Moderate

Assuming the 90 days horizon Yorktown Small Cap Fund is expected to generate 2.21 times more return on investment than Calvert Moderate. However, Yorktown Small-cap is 2.21 times more volatile than Calvert Moderate Allocation. It trades about 0.1 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.03 per unit of risk. If you would invest  1,598  in Yorktown Small Cap Fund on October 25, 2024 and sell it today you would earn a total of  106.00  from holding Yorktown Small Cap Fund or generate 6.63% return on investment over 90 days.

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

Yorktown Small Cap Fund  vs.  Calvert Moderate Allocation

Yorktown Small Cap

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yorktown Small Cap Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady forward indicators, Yorktown Small-cap may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Calvert Moderate All

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Moderate Allocation are ranked lower than 2 (%) 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.

Pair Trading with Yorktown Small-cap and Calvert Moderate

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

The idea behind Yorktown Small Cap Fund and Calvert Moderate Allocation 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.