Correlation Between Calamos Timpani and Kirr Marbach
Can any of the company-specific risk be diversified away by investing in both Calamos Timpani and Kirr Marbach 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 Timpani and Kirr Marbach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calamos Timpani Small and Kirr Marbach Partners, you can compare the effects of market volatilities on Calamos Timpani and Kirr Marbach 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 Timpani with a short position of Kirr Marbach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Timpani and Kirr Marbach.
Diversification Opportunities for Calamos Timpani and Kirr Marbach
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calamos and Kirr is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Timpani Small and Kirr Marbach Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirr Marbach Partners and Calamos Timpani 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 Timpani Small are associated (or correlated) with Kirr Marbach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirr Marbach Partners has no effect on the direction of Calamos Timpani i.e., Calamos Timpani and Kirr Marbach go up and down completely randomly.
Pair Corralation between Calamos Timpani and Kirr Marbach
Assuming the 90 days horizon Calamos Timpani Small is expected to generate 0.77 times more return on investment than Kirr Marbach. However, Calamos Timpani Small is 1.29 times less risky than Kirr Marbach. It trades about -0.15 of its potential returns per unit of risk. Kirr Marbach Partners is currently generating about -0.13 per unit of risk. If you would invest 3,952 in Calamos Timpani Small on October 9, 2024 and sell it today you would lose (203.00) from holding Calamos Timpani Small or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calamos Timpani Small vs. Kirr Marbach Partners
Performance |
| Timeline |
| Calamos Timpani Small |
| Kirr Marbach Partners |
Calamos Timpani and Kirr Marbach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calamos Timpani and Kirr Marbach
The main advantage of trading using opposite Calamos Timpani and Kirr Marbach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Timpani position performs unexpectedly, Kirr Marbach 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 Kirr Marbach will offset losses from the drop in Kirr Marbach's long position.The idea behind Calamos Timpani Small and Kirr Marbach Partners 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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