Correlation Between Calamos Strategic and First Trust
Can any of the company-specific risk be diversified away by investing in both Calamos Strategic and First Trust 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 Strategic and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calamos Strategic Total and First Trust Specialty, you can compare the effects of market volatilities on Calamos Strategic and First Trust 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 Strategic with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Strategic and First Trust.
Diversification Opportunities for Calamos Strategic and First Trust
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calamos and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Strategic Total and First Trust Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Specialty and Calamos Strategic 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 Strategic Total are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Specialty has no effect on the direction of Calamos Strategic i.e., Calamos Strategic and First Trust go up and down completely randomly.
Pair Corralation between Calamos Strategic and First Trust
Considering the 90-day investment horizon Calamos Strategic is expected to generate 1.57 times less return on investment than First Trust. In addition to that, Calamos Strategic is 1.3 times more volatile than First Trust Specialty. It trades about 0.16 of its total potential returns per unit of risk. First Trust Specialty is currently generating about 0.33 per unit of volatility. If you would invest 404.00 in First Trust Specialty on August 31, 2024 and sell it today you would earn a total of 20.00 from holding First Trust Specialty or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calamos Strategic Total vs. First Trust Specialty
Performance |
| Timeline |
| Calamos Strategic Total |
| First Trust Specialty |
Calamos Strategic and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calamos Strategic and First Trust
The main advantage of trading using opposite Calamos Strategic and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Strategic position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Calamos Strategic vs. Calamos Convertible Opportunities | Calamos Strategic vs. Calamos Dynamic Convertible | Calamos Strategic vs. Calamos Global Dynamic | Calamos Strategic vs. Calamos LongShort Equity |
| First Trust vs. MFS Investment Grade | First Trust vs. Eaton Vance Municipal | First Trust vs. DTF Tax Free | First Trust vs. HUMANA INC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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