Correlation Between Invesco Convertible and Calamos Dynamic
Can any of the company-specific risk be diversified away by investing in both Invesco Convertible and Calamos Dynamic 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 Invesco Convertible and Calamos Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Vertible Securities and Calamos Dynamic Convertible, you can compare the effects of market volatilities on Invesco Convertible and Calamos Dynamic 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 Invesco Convertible with a short position of Calamos Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Convertible and Calamos Dynamic.
Diversification Opportunities for Invesco Convertible and Calamos Dynamic
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Calamos is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Vertible Securities and Calamos Dynamic Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Dynamic Conv and Invesco 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 Invesco Vertible Securities are associated (or correlated) with Calamos Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Dynamic Conv has no effect on the direction of Invesco Convertible i.e., Invesco Convertible and Calamos Dynamic go up and down completely randomly.
Pair Corralation between Invesco Convertible and Calamos Dynamic
Assuming the 90 days horizon Invesco Convertible is expected to generate 2.3 times less return on investment than Calamos Dynamic. But when comparing it to its historical volatility, Invesco Vertible Securities is 2.0 times less risky than Calamos Dynamic. It trades about 0.11 of its potential returns per unit of risk. Calamos Dynamic Convertible is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,861 in Calamos Dynamic Convertible on August 24, 2024 and sell it today you would earn a total of 590.00 from holding Calamos Dynamic Convertible or generate 31.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Vertible Securities vs. Calamos Dynamic Convertible
Performance |
| Timeline |
| Invesco Vertible Sec |
| Calamos Dynamic Conv |
Invesco Convertible and Calamos Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Convertible and Calamos Dynamic
The main advantage of trading using opposite Invesco Convertible and Calamos Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Convertible position performs unexpectedly, Calamos Dynamic 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 Dynamic will offset losses from the drop in Calamos Dynamic's long position.The idea behind Invesco Vertible Securities and Calamos Dynamic Convertible 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 Dynamic vs. Calamos Convertible Opportunities | Calamos Dynamic vs. Calamos Global Dynamic | Calamos Dynamic vs. Calamos Strategic Total | Calamos Dynamic vs. Calamos LongShort Equity |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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