Correlation Between Calamos Market and Innealta Capital
Can any of the company-specific risk be diversified away by investing in both Calamos Market 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 Market 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 Market Neutral and Innealta Capital Sector, you can compare the effects of market volatilities on Calamos Market 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 Market with a short position of Innealta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Market and Innealta Capital.
Diversification Opportunities for Calamos Market and Innealta Capital
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calamos and Innealta is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Market Neutral 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 Market 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 Market Neutral 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 Market i.e., Calamos Market and Innealta Capital go up and down completely randomly.
Pair Corralation between Calamos Market and Innealta Capital
Assuming the 90 days horizon Calamos Market is expected to generate 2.71 times less return on investment than Innealta Capital. But when comparing it to its historical volatility, Calamos Market Neutral is 3.57 times less risky than Innealta Capital. It trades about 0.11 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 | Strong |
| Accuracy | 92.93% |
| Values | Daily Returns |
Calamos Market Neutral vs. Innealta Capital Sector
Performance |
| Timeline |
| Calamos Market Neutral |
| Innealta Capital Sector |
Calamos Market and Innealta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calamos Market and Innealta Capital
The main advantage of trading using opposite Calamos Market and Innealta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Market 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.| Calamos Market vs. The Arbitrage Fund | Calamos Market vs. The Merger Fund | Calamos Market vs. Gateway Fund Class | Calamos Market vs. Diamond Hill Long Short |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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