Correlation Between Prudential Emerging and Calamos High

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Can any of the company-specific risk be diversified away by investing in both Prudential Emerging and Calamos High 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 Prudential Emerging and Calamos High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Emerging Markets and Calamos High Income, you can compare the effects of market volatilities on Prudential Emerging and Calamos High 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 Prudential Emerging with a short position of Calamos High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Emerging and Calamos High.

Diversification Opportunities for Prudential Emerging and Calamos High

PrudentialCalamosDiversified AwayPrudentialCalamosDiversified Away100%
0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Prudential and Calamos is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Emerging Markets and Calamos High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos High Income and Prudential Emerging 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 Prudential Emerging Markets are associated (or correlated) with Calamos High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos High Income has no effect on the direction of Prudential Emerging i.e., Prudential Emerging and Calamos High go up and down completely randomly.

Pair Corralation between Prudential Emerging and Calamos High

Assuming the 90 days horizon Prudential Emerging Markets is expected to generate 2.32 times more return on investment than Calamos High. However, Prudential Emerging is 2.32 times more volatile than Calamos High Income. It trades about 0.23 of its potential returns per unit of risk. Calamos High Income is currently generating about 0.1 per unit of risk. If you would invest  451.00  in Prudential Emerging Markets on November 27, 2024 and sell it today you would earn a total of  6.00  from holding Prudential Emerging Markets or generate 1.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Prudential Emerging Markets  vs.  Calamos High Income

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1.5-1.0-0.50.00.51.01.5
JavaScript chart by amCharts 3.21.15EMDQX CHYDX
       Timeline  
Prudential Emerging 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Emerging Markets are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4.44.454.54.55
Calamos High Income 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Calamos High Income are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calamos High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.727.747.767.787.87.827.84

Prudential Emerging and Calamos High Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.2-0.87-0.54-0.210.005330.240.570.91.231.56 5101520
JavaScript chart by amCharts 3.21.15EMDQX CHYDX
       Returns  

Pair Trading with Prudential Emerging and Calamos High

The main advantage of trading using opposite Prudential Emerging and Calamos High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Emerging position performs unexpectedly, Calamos High 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 High will offset losses from the drop in Calamos High's long position.
The idea behind Prudential Emerging Markets and Calamos High Income 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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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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