Correlation Between Merck and Calamos Strategic
Can any of the company-specific risk be diversified away by investing in both Merck 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 Merck and Calamos Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Calamos Strategic Total, you can compare the effects of market volatilities on Merck 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 Merck with a short position of Calamos Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Calamos Strategic.
Diversification Opportunities for Merck and Calamos Strategic
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and Calamos is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company 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 Merck 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 Merck Company 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 Merck i.e., Merck and Calamos Strategic go up and down completely randomly.
Pair Corralation between Merck and Calamos Strategic
Considering the 90-day investment horizon Merck Company is expected to under-perform the Calamos Strategic. In addition to that, Merck is 3.49 times more volatile than Calamos Strategic Total. It trades about -0.35 of its total potential returns per unit of risk. Calamos Strategic Total is currently generating about 0.14 per unit of volatility. If you would invest 1,804 in Calamos Strategic Total on November 18, 2024 and sell it today you would earn a total of 34.00 from holding Calamos Strategic Total or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Calamos Strategic Total
Performance |
| Timeline |
| Merck Company |
| Calamos Strategic Total |
Merck and Calamos Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Calamos Strategic
The main advantage of trading using opposite Merck and Calamos Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck 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 Merck Company 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. Calamos Convertible Opportunities | Calamos Strategic vs. Calamos Dynamic Convertible | Calamos Strategic vs. Calamos Global Dynamic | Calamos Strategic vs. Calamos LongShort Equity |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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