Correlation Between Microsoft and Calamos High
Can any of the company-specific risk be diversified away by investing in both Microsoft and Calamos High 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 Microsoft and Calamos High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Calamos High Income, you can compare the effects of market volatilities on Microsoft and Calamos High 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 Microsoft with a short position of Calamos High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Calamos High.
Diversification Opportunities for Microsoft and Calamos High
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and Calamos is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Calamos High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos High Income and Microsoft 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 Microsoft are associated (or correlated) with Calamos High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos High Income has no effect on the direction of Microsoft i.e., Microsoft and Calamos High go up and down completely randomly.
Pair Corralation between Microsoft and Calamos High
Given the investment horizon of 90 days Microsoft is expected to generate 6.27 times more return on investment than Calamos High. However, Microsoft is 6.27 times more volatile than Calamos High Income. It trades about 0.07 of its potential returns per unit of risk. Calamos High Income is currently generating about 0.29 per unit of risk. If you would invest 33,492 in Microsoft on August 26, 2024 and sell it today you would earn a total of 8,208 from holding Microsoft or generate 24.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Calamos High Income
Performance |
| Timeline |
| Microsoft |
| Calamos High Income |
Microsoft and Calamos High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Calamos High
The main advantage of trading using opposite Microsoft and Calamos High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Calamos High 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 High will offset losses from the drop in Calamos High's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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