Correlation Between Microsoft and Calamos Growth
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and Calamos Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Calamos Growth Income, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of Calamos Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Calamos Growth.
Diversification Opportunities for Microsoft and Calamos Growth
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Calamos is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft 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 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 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 Microsoft i.e., Microsoft and Calamos Growth go up and down completely randomly.
Pair Corralation between Microsoft and Calamos Growth
Given the investment horizon of 90 days Microsoft is expected to generate 2.03 times more return on investment than Calamos Growth. However, Microsoft is 2.03 times more volatile than Calamos Growth Income. It trades about 0.08 of its potential returns per unit of risk. Calamos Growth Income is currently generating about 0.08 per unit of risk. If you would invest 24,616 in Microsoft on August 25, 2024 and sell it today you would earn a total of 17,084 from holding Microsoft or generate 69.4% 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 Growth Income
Performance |
| Timeline |
| Microsoft |
| Calamos Growth Income |
Microsoft and Calamos Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Calamos Growth
The main advantage of trading using opposite Microsoft and Calamos Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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