Correlation Between GE Aerospace and Calamos Convertible
Can any of the company-specific risk be diversified away by investing in both GE Aerospace and Calamos Convertible 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 GE Aerospace and Calamos Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Aerospace and Calamos Convertible And, you can compare the effects of market volatilities on GE Aerospace and Calamos Convertible 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 GE Aerospace with a short position of Calamos Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Aerospace and Calamos Convertible.
Diversification Opportunities for GE Aerospace and Calamos Convertible
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GE Aerospace and Calamos is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GE Aerospace and Calamos Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Convertible And and GE Aerospace 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 GE Aerospace are associated (or correlated) with Calamos Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Convertible And has no effect on the direction of GE Aerospace i.e., GE Aerospace and Calamos Convertible go up and down completely randomly.
Pair Corralation between GE Aerospace and Calamos Convertible
Allowing for the 90-day total investment horizon GE Aerospace is expected to generate 1.58 times more return on investment than Calamos Convertible. However, GE Aerospace is 1.58 times more volatile than Calamos Convertible And. It trades about 0.1 of its potential returns per unit of risk. Calamos Convertible And is currently generating about 0.15 per unit of risk. If you would invest 17,536 in GE Aerospace on August 28, 2024 and sell it today you would earn a total of 485.00 from holding GE Aerospace or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Aerospace vs. Calamos Convertible And
Performance |
| Timeline |
| GE Aerospace |
| Calamos Convertible And |
GE Aerospace and Calamos Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Aerospace and Calamos Convertible
The main advantage of trading using opposite GE Aerospace and Calamos Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Aerospace position performs unexpectedly, Calamos Convertible 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 Convertible will offset losses from the drop in Calamos Convertible's long position.| GE Aerospace vs. Illinois Tool Works | GE Aerospace vs. Dover | GE Aerospace vs. Cummins | GE Aerospace vs. Eaton PLC |
| Calamos Convertible vs. Calamos Global Dynamic | Calamos Convertible vs. Calamos Strategic Total | Calamos Convertible vs. Calamos LongShort Equity | Calamos Convertible vs. DTF Tax Free |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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