Correlation Between Clearbridge Large and Calvert Smallcap

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

By analyzing existing cross correlation between Clearbridge Large Cap and Calvert Smallcap Fund6, you can compare the effects of market volatilities on Clearbridge Large and Calvert Smallcap 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 Clearbridge Large with a short position of Calvert Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Large and Calvert Smallcap.

Diversification Opportunities for Clearbridge Large and Calvert Smallcap

0.04

Correlation Coefficient

Clearbridge Large  Calvert Smallcap

Significant diversification

The 3 months correlation between Clearbridge and Calvert is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large Cap and Calvert Smallcap Fund6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Smallcap Fund6 and Clearbridge 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 Clearbridge Large Cap are associated (or correlated) with Calvert Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Smallcap Fund6 has no effect on the direction of Clearbridge Large i.e., Clearbridge Large and Calvert Smallcap go up and down completely randomly.

Pair Corralation between Clearbridge Large and Calvert Smallcap

Assuming the 90 days horizon Clearbridge Large Cap is expected to generate 0.55 times more return on investment than Calvert Smallcap. However, Clearbridge Large Cap is 1.8 times less risky than Calvert Smallcap. It trades about 0.16 of its potential returns per unit of risk. Calvert Smallcap Fund6 is currently generating about 0.01 per unit of risk. If you would invest  4,008  in Clearbridge Large Cap on July 31, 2025 and sell it today you would earn a total of  256.00  from holding Clearbridge Large Cap or generate 6.39% return on investment over 90 days.

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

Clearbridge Large Cap  vs.  Calvert Smallcap Fund6

Clearbridge Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Clearbridge Large may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Calvert Smallcap Fund6

Risk-Adjusted Performance

Weakest

Over the last 90 days Calvert Smallcap Fund6 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Calvert Smallcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Clearbridge Large and Calvert Smallcap

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

The idea behind Clearbridge Large Cap and Calvert Smallcap Fund6 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.