Correlation Between Calamos Market and Westwood Alternative
Can any of the company-specific risk be diversified away by investing in both Calamos Market and Westwood Alternative 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 Westwood Alternative 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 Westwood Alternative Income, you can compare the effects of market volatilities on Calamos Market and Westwood Alternative 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 Westwood Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Market and Westwood Alternative.
Diversification Opportunities for Calamos Market and Westwood Alternative
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calamos and Westwood is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Market Neutral and Westwood Alternative Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Alternative 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 Westwood Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Alternative has no effect on the direction of Calamos Market i.e., Calamos Market and Westwood Alternative go up and down completely randomly.
Pair Corralation between Calamos Market and Westwood Alternative
Assuming the 90 days horizon Calamos Market Neutral is expected to generate 1.44 times more return on investment than Westwood Alternative. However, Calamos Market is 1.44 times more volatile than Westwood Alternative Income. It trades about 0.27 of its potential returns per unit of risk. Westwood Alternative Income is currently generating about 0.27 per unit of risk. If you would invest 1,515 in Calamos Market Neutral on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Calamos Market Neutral or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calamos Market Neutral vs. Westwood Alternative Income
Performance |
| Timeline |
| Calamos Market Neutral |
| Westwood Alternative |
Calamos Market and Westwood Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calamos Market and Westwood Alternative
The main advantage of trading using opposite Calamos Market and Westwood Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Market position performs unexpectedly, Westwood Alternative 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 Westwood Alternative will offset losses from the drop in Westwood Alternative'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 |
| Westwood Alternative vs. Calamos Market Neutral | Westwood Alternative vs. Calamos Market Neutral | Westwood Alternative vs. Calamos Market Neutral | Westwood Alternative vs. Calamos Market Neutral |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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