Correlation Between First Trust and Calamos ETF
Can any of the company-specific risk be diversified away by investing in both First Trust and Calamos ETF 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 First Trust and Calamos ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Multi Manager and Calamos ETF Trust, you can compare the effects of market volatilities on First Trust and Calamos ETF 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 First Trust with a short position of Calamos ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Calamos ETF.
Diversification Opportunities for First Trust and Calamos ETF
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Calamos is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Multi Manager and Calamos ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos ETF Trust and First Trust 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 First Trust Multi Manager are associated (or correlated) with Calamos ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos ETF Trust has no effect on the direction of First Trust i.e., First Trust and Calamos ETF go up and down completely randomly.
Pair Corralation between First Trust and Calamos ETF
Given the investment horizon of 90 days First Trust Multi Manager is expected to generate 4.03 times more return on investment than Calamos ETF. However, First Trust is 4.03 times more volatile than Calamos ETF Trust. It trades about 0.08 of its potential returns per unit of risk. Calamos ETF Trust is currently generating about 0.19 per unit of risk. If you would invest 1,457 in First Trust Multi Manager on August 30, 2024 and sell it today you would earn a total of 796.00 from holding First Trust Multi Manager or generate 54.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 21.41% |
| Values | Daily Returns |
First Trust Multi Manager vs. Calamos ETF Trust
Performance |
| Timeline |
| First Trust Multi |
| Calamos ETF Trust |
First Trust and Calamos ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Calamos ETF
The main advantage of trading using opposite First Trust and Calamos ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Calamos ETF 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 ETF will offset losses from the drop in Calamos ETF's long position.| First Trust vs. iShares Russell 2000 | First Trust vs. iShares Russell Mid Cap | First Trust vs. iShares Russell 1000 | First Trust vs. iShares Russell 1000 |
| Calamos ETF vs. Dimensional ETF Trust | Calamos ETF vs. Vanguard Small Cap Index | Calamos ETF vs. First Trust Multi Manager | Calamos ETF vs. Vanguard SP Small Cap |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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