Correlation Between Alphabet and Calamos Hedged
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Calamos Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Calamos Hedged Equity, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Calamos Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Calamos Hedged.
Diversification Opportunities for Alphabet and Calamos Hedged
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alphabet and Calamos is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Calamos Hedged go up and down completely randomly.
Pair Corralation between Alphabet and Calamos Hedged
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 4.16 times more return on investment than Calamos Hedged. However, Alphabet is 4.16 times more volatile than Calamos Hedged Equity. It trades about 0.04 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 16,834 in Alphabet Inc Class C on August 29, 2024 and sell it today you would earn a total of 228.00 from holding Alphabet Inc Class C or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Calamos Hedged Equity
Performance |
| Timeline |
| Alphabet Class C |
| Calamos Hedged Equity |
Alphabet and Calamos Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Calamos Hedged
The main advantage of trading using opposite Alphabet and Calamos Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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.The idea behind Alphabet Inc Class C and Calamos Hedged 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.| Calamos Hedged vs. Pace Smallmedium Value | Calamos Hedged vs. Columbia Small Cap | Calamos Hedged vs. Ab Discovery Value | Calamos Hedged vs. Hennessy Nerstone Mid |
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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