Correlation Between Gabelli Global and Calamos LongShort

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

Diversification Opportunities for Gabelli Global and Calamos LongShort

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Gabelli and Calamos is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small and Calamos LongShort Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos LongShort Equity and Gabelli Global 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 Gabelli Global Small are associated (or correlated) with Calamos LongShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos LongShort Equity has no effect on the direction of Gabelli Global i.e., Gabelli Global and Calamos LongShort go up and down completely randomly.

Pair Corralation between Gabelli Global and Calamos LongShort

Considering the 90-day investment horizon Gabelli Global Small is expected to generate 1.75 times more return on investment than Calamos LongShort. However, Gabelli Global is 1.75 times more volatile than Calamos LongShort Equity. It trades about 0.18 of its potential returns per unit of risk. Calamos LongShort Equity is currently generating about -0.03 per unit of risk. If you would invest  1,224  in Gabelli Global Small on August 24, 2024 and sell it today you would earn a total of  55.00  from holding Gabelli Global Small or generate 4.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Gabelli Global Small  vs.  Calamos LongShort Equity

 Performance 
       Timeline  
Gabelli Global Small 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Gabelli Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Calamos LongShort Equity 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Calamos LongShort Equity are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Calamos LongShort is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Global and Calamos LongShort Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gabelli Global and Calamos LongShort

The main advantage of trading using opposite Gabelli Global and Calamos LongShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global position performs unexpectedly, Calamos LongShort 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 LongShort will offset losses from the drop in Calamos LongShort's long position.
The idea behind Gabelli Global Small and Calamos LongShort Equity 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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