Correlation Between Calamos Convertible and Fidelity New
Can any of the company-specific risk be diversified away by investing in both Calamos Convertible and Fidelity New 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 Calamos Convertible and Fidelity New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calamos Vertible Fund and Fidelity New Markets, you can compare the effects of market volatilities on Calamos Convertible and Fidelity New 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 Calamos Convertible with a short position of Fidelity New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Convertible and Fidelity New.
Diversification Opportunities for Calamos Convertible and Fidelity New
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Calamos and Fidelity is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Vertible Fund and Fidelity New Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Markets and Calamos Convertible 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 Calamos Vertible Fund are associated (or correlated) with Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Markets has no effect on the direction of Calamos Convertible i.e., Calamos Convertible and Fidelity New go up and down completely randomly.
Pair Corralation between Calamos Convertible and Fidelity New
Assuming the 90 days horizon Calamos Vertible Fund is expected to under-perform the Fidelity New. In addition to that, Calamos Convertible is 2.89 times more volatile than Fidelity New Markets. It trades about -0.25 of its total potential returns per unit of risk. Fidelity New Markets is currently generating about -0.42 per unit of volatility. If you would invest 1,300 in Fidelity New Markets on October 8, 2024 and sell it today you would lose (29.00) from holding Fidelity New Markets or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calamos Vertible Fund vs. Fidelity New Markets
Performance |
| Timeline |
| Calamos Convertible |
| Fidelity New Markets |
Calamos Convertible and Fidelity New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calamos Convertible and Fidelity New
The main advantage of trading using opposite Calamos Convertible and Fidelity New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Convertible position performs unexpectedly, Fidelity New 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 Fidelity New will offset losses from the drop in Fidelity New's long position.The idea behind Calamos Vertible Fund and Fidelity New Markets 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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