Correlation Between HP and Calamos Strategic
Can any of the company-specific risk be diversified away by investing in both HP and Calamos Strategic 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 HP and Calamos Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Calamos Strategic Total, you can compare the effects of market volatilities on HP and Calamos Strategic 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 HP with a short position of Calamos Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Calamos Strategic.
Diversification Opportunities for HP and Calamos Strategic
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HP and Calamos is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Calamos Strategic Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Strategic Total and HP 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 HP Inc are associated (or correlated) with Calamos Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Strategic Total has no effect on the direction of HP i.e., HP and Calamos Strategic go up and down completely randomly.
Pair Corralation between HP and Calamos Strategic
Considering the 90-day investment horizon HP Inc is expected to generate 1.89 times more return on investment than Calamos Strategic. However, HP is 1.89 times more volatile than Calamos Strategic Total. It trades about 0.14 of its potential returns per unit of risk. Calamos Strategic Total is currently generating about 0.15 per unit of risk. If you would invest 3,742 in HP Inc on August 28, 2024 and sell it today you would earn a total of 188.00 from holding HP Inc or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Calamos Strategic Total
Performance |
| Timeline |
| HP Inc |
| Calamos Strategic Total |
HP and Calamos Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Calamos Strategic
The main advantage of trading using opposite HP and Calamos Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Calamos Strategic 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 Strategic will offset losses from the drop in Calamos Strategic's long position.The idea behind HP Inc and Calamos Strategic Total 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 Strategic vs. Allspring Income Opportunities | Calamos Strategic vs. Allspring Global Dividend | Calamos Strategic vs. Blackstone Gso Senior | Calamos Strategic vs. John Hancock Preferred |
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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