Correlation Between Calvert Developed and Vaughan Nelson

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

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

Diversification Opportunities for Calvert Developed and Vaughan Nelson

0.46

Correlation Coefficient

Calvert Developed  Vaughan Nelson

Very weak diversification

The 3 months correlation between Calvert and Vaughan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Developed Market and Vaughan Nelson Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaughan Nelson Small and Calvert Developed 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 Developed Market are associated (or correlated) with Vaughan Nelson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaughan Nelson Small has no effect on the direction of Calvert Developed i.e., Calvert Developed and Vaughan Nelson go up and down completely randomly.

Pair Corralation between Calvert Developed and Vaughan Nelson

Assuming the 90 days horizon Calvert Developed is expected to generate 1.09 times less return on investment than Vaughan Nelson. But when comparing it to its historical volatility, Calvert Developed Market is 1.32 times less risky than Vaughan Nelson. It trades about 0.1 of its potential returns per unit of risk. Vaughan Nelson Small is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,221  in Vaughan Nelson Small on September 10, 2025 and sell it today you would earn a total of  122.00  from holding Vaughan Nelson Small or generate 5.49% return on investment over 90 days.

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

Calvert Developed Market  vs.  Vaughan Nelson Small

Calvert Developed Market

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Developed Market are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Developed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vaughan Nelson Small

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Vaughan Nelson Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vaughan Nelson 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 Developed and Vaughan Nelson

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

The idea behind Calvert Developed Market and Vaughan Nelson Small 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.