Correlation Between Calvert Large and California Municipal
Can any of the company-specific risk be diversified away by investing in both Calvert Large and California Municipal 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 California Municipal 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 California Municipal Portfolio, you can compare the effects of market volatilities on Calvert Large and California Municipal 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 California Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Large and California Municipal.
Diversification Opportunities for Calvert Large and California Municipal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and California is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and California Municipal Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Municipal 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 California Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Municipal has no effect on the direction of Calvert Large i.e., Calvert Large and California Municipal go up and down completely randomly.
Pair Corralation between Calvert Large and California Municipal
Assuming the 90 days horizon Calvert Large Cap is expected to generate 8.14 times more return on investment than California Municipal. However, Calvert Large is 8.14 times more volatile than California Municipal Portfolio. It trades about 0.23 of its potential returns per unit of risk. California Municipal Portfolio is currently generating about 0.19 per unit of risk. If you would invest 3,095 in Calvert Large Cap on April 25, 2025 and sell it today you would earn a total of 361.00 from holding Calvert Large Cap or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Large Cap vs. California Municipal Portfolio
Performance |
| Timeline |
| Calvert Large Cap |
| California Municipal |
Calvert Large and California Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Large and California Municipal
The main advantage of trading using opposite Calvert Large and California Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Large position performs unexpectedly, California Municipal 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 California Municipal will offset losses from the drop in California Municipal's long position.| Calvert Large vs. Qs Growth Fund | Calvert Large vs. T Rowe Price | Calvert Large vs. Qs Defensive Growth | Calvert Large vs. Evaluator Growth Rms |
| California Municipal vs. New York Municipal | California Municipal vs. Oppenheimer Rochester Ltdterm | California Municipal vs. New York Municipal |
Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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