Correlation Between Disney and Calamos Hedged
Can any of the company-specific risk be diversified away by investing in both Disney and Calamos Hedged 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 Disney and Calamos Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Calamos Hedged Equity, you can compare the effects of market volatilities on Disney and Calamos Hedged 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 Disney with a short position of Calamos Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Calamos Hedged.
Diversification Opportunities for Disney and Calamos Hedged
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Disney and Calamos is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Calamos Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Hedged Equity and Disney 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 Walt Disney are associated (or correlated) with Calamos Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Hedged Equity has no effect on the direction of Disney i.e., Disney and Calamos Hedged go up and down completely randomly.
Pair Corralation between Disney and Calamos Hedged
Considering the 90-day investment horizon Walt Disney is expected to generate 3.93 times more return on investment than Calamos Hedged. However, Disney is 3.93 times more volatile than Calamos Hedged Equity. It trades about 0.47 of its potential returns per unit of risk. Calamos Hedged Equity is currently generating about 0.15 per unit of risk. If you would invest 9,620 in Walt Disney on August 29, 2024 and sell it today you would earn a total of 2,085 from holding Walt Disney or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Calamos Hedged Equity
Performance |
| Timeline |
| Walt Disney |
| Calamos Hedged Equity |
Disney and Calamos Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Calamos Hedged
The main advantage of trading using opposite Disney and Calamos Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Calamos Hedged 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 Hedged will offset losses from the drop in Calamos Hedged's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| Calamos Hedged vs. American Beacon Soundpointfltrtinc | Calamos Hedged vs. Calamos Hedged Equity | Calamos Hedged vs. Calamos Market Neutral | Calamos Hedged vs. Aqr Long Short 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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