Correlation Between Calvert High and Alambic Small

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

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

Diversification Opportunities for Calvert High and Alambic Small

0.0

Correlation Coefficient

Calvert High  Alambic Small

Pay attention - limited upside

The 3 months correlation between Calvert and Alambic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Calvert High Yield and Alambic Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alambic Small Cap and Calvert High 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 High Yield are associated (or correlated) with Alambic Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alambic Small Cap has no effect on the direction of Calvert High i.e., Calvert High and Alambic Small go up and down completely randomly.

Pair Corralation between Calvert High and Alambic Small

If you would invest (100.00) in Alambic Small Cap on February 1, 2024 and sell it today you would earn a total of  100.00  from holding Alambic Small Cap or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Calvert High Yield  vs.  Alambic Small Cap

Calvert High Yield

Risk-Adjusted Performance

0 of 100

Weak

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

Alambic Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alambic Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alambic Small 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 High and Alambic Small

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

The idea behind Calvert High Yield and Alambic Small 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.