Correlation Between First Trust and Calamos ETF
Can any of the company-specific risk be diversified away by investing in both First Trust and Calamos ETF 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 First Trust and Calamos ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Cboe and Calamos ETF Trust, you can compare the effects of market volatilities on First Trust and Calamos ETF 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 First Trust with a short position of Calamos ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Calamos ETF.
Diversification Opportunities for First Trust and Calamos ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Calamos is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Cboe and Calamos ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos ETF Trust and First Trust 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 First Trust Cboe are associated (or correlated) with Calamos ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos ETF Trust has no effect on the direction of First Trust i.e., First Trust and Calamos ETF go up and down completely randomly.
Pair Corralation between First Trust and Calamos ETF
Given the investment horizon of 90 days First Trust Cboe is expected to generate 1.78 times more return on investment than Calamos ETF. However, First Trust is 1.78 times more volatile than Calamos ETF Trust. It trades about 0.12 of its potential returns per unit of risk. Calamos ETF Trust is currently generating about 0.19 per unit of risk. If you would invest 2,271 in First Trust Cboe on August 26, 2024 and sell it today you would earn a total of 779.00 from holding First Trust Cboe or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 20.93% |
| Values | Daily Returns |
First Trust Cboe vs. Calamos ETF Trust
Performance |
| Timeline |
| First Trust Cboe |
| Calamos ETF Trust |
First Trust and Calamos ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Calamos ETF
The main advantage of trading using opposite First Trust and Calamos ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Calamos ETF 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 Calamos ETF will offset losses from the drop in Calamos ETF's long position.The idea behind First Trust Cboe and Calamos ETF Trust 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.| Calamos ETF vs. Dimensional ETF Trust | Calamos ETF vs. Vanguard Small Cap Index | Calamos ETF vs. First Trust Multi Manager | Calamos ETF vs. Vanguard SP Small Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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