Correlation Between The Merger and Calamos Growth
Can any of the company-specific risk be diversified away by investing in both The Merger and Calamos Growth 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 The Merger and Calamos Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Merger Fund and Calamos Growth Income, you can compare the effects of market volatilities on The Merger and Calamos Growth 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 The Merger with a short position of Calamos Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Merger and Calamos Growth.
Diversification Opportunities for The Merger and Calamos Growth
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and Calamos is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Merger Fund and Calamos Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Growth Income and The Merger 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 The Merger Fund are associated (or correlated) with Calamos Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Growth Income has no effect on the direction of The Merger i.e., The Merger and Calamos Growth go up and down completely randomly.
Pair Corralation between The Merger and Calamos Growth
Assuming the 90 days horizon The Merger is expected to generate 7.56 times less return on investment than Calamos Growth. But when comparing it to its historical volatility, The Merger Fund is 3.35 times less risky than Calamos Growth. It trades about 0.04 of its potential returns per unit of risk. Calamos Growth Income is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,811 in Calamos Growth Income on August 28, 2024 and sell it today you would earn a total of 1,305 from holding Calamos Growth Income or generate 34.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Merger Fund vs. Calamos Growth Income
Performance |
| Timeline |
| Merger Fund |
| Calamos Growth Income |
The Merger and Calamos Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Merger and Calamos Growth
The main advantage of trading using opposite The Merger and Calamos Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Merger position performs unexpectedly, Calamos Growth 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 Growth will offset losses from the drop in Calamos Growth's long position.| The Merger vs. Strategic Advisers International | The Merger vs. Strategic Advisers Income | The Merger vs. Strategic Advisers E | The Merger vs. Strategic Advisers Emerging |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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