Correlation Between Microsoft and Calvert Equity

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

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

Diversification Opportunities for Microsoft and Calvert Equity

0.33

Correlation Coefficient

Microsoft  Calvert Equity

Weak diversification

The 3 months correlation between Microsoft and Calvert is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Calvert Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Equity and Microsoft 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 Microsoft are associated (or correlated) with Calvert Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Equity has no effect on the direction of Microsoft i.e., Microsoft and Calvert Equity go up and down completely randomly.

Pair Corralation between Microsoft and Calvert Equity

Given the investment horizon of 90 days Microsoft is expected to under-perform the Calvert Equity. In addition to that, Microsoft is 1.65 times more volatile than Calvert Equity Fund. It trades about -0.03 of its total potential returns per unit of risk. Calvert Equity Fund is currently generating about 0.04 per unit of volatility. If you would invest  9,795  in Calvert Equity Fund on September 1, 2025 and sell it today you would earn a total of  143.00  from holding Calvert Equity Fund or generate 1.46% return on investment over 90 days.

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

Microsoft  vs.  Calvert Equity Fund

Microsoft

Risk-Adjusted Performance

Weakest

Over the last 90 days Microsoft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Calvert Equity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Equity Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Equity is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Microsoft and Calvert Equity

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

The idea behind Microsoft and Calvert Equity Fund 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 Commodity Directory module to find actively traded commodities issued by global exchanges.