Correlation Between Calamos Investment and Innealta Capital
Can any of the company-specific risk be diversified away by investing in both Calamos Investment and Innealta Capital 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 Investment and Innealta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calamos Investment Trust and Innealta Capital Sector, you can compare the effects of market volatilities on Calamos Investment and Innealta Capital 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 Investment with a short position of Innealta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Investment and Innealta Capital.
Diversification Opportunities for Calamos Investment and Innealta Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calamos and Innealta is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Investment Trust and Innealta Capital Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innealta Capital Sector and Calamos Investment 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 Investment Trust are associated (or correlated) with Innealta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innealta Capital Sector has no effect on the direction of Calamos Investment i.e., Calamos Investment and Innealta Capital go up and down completely randomly.
Pair Corralation between Calamos Investment and Innealta Capital
Assuming the 90 days horizon Calamos Investment is expected to generate 6.85 times less return on investment than Innealta Capital. But when comparing it to its historical volatility, Calamos Investment Trust is 1.98 times less risky than Innealta Capital. It trades about 0.02 of its potential returns per unit of risk. Innealta Capital Sector is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 989.00 in Innealta Capital Sector on September 4, 2024 and sell it today you would earn a total of 311.00 from holding Innealta Capital Sector or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 64.35% |
| Values | Daily Returns |
Calamos Investment Trust vs. Innealta Capital Sector
Performance |
| Timeline |
| Calamos Investment Trust |
| Innealta Capital Sector |
Calamos Investment and Innealta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calamos Investment and Innealta Capital
The main advantage of trading using opposite Calamos Investment and Innealta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Investment position performs unexpectedly, Innealta Capital 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 Innealta Capital will offset losses from the drop in Innealta Capital's long position.The idea behind Calamos Investment Trust and Innealta Capital Sector 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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