Correlation Between Vanguard Financials and Calamos Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Financials and Calamos Global 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 Vanguard Financials and Calamos Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Financials Index and Calamos Global Equity, you can compare the effects of market volatilities on Vanguard Financials and Calamos Global 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 Vanguard Financials with a short position of Calamos Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Financials and Calamos Global.
Diversification Opportunities for Vanguard Financials and Calamos Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Calamos is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Financials Index and Calamos Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Global Equity and Vanguard Financials 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 Vanguard Financials Index are associated (or correlated) with Calamos Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Global Equity has no effect on the direction of Vanguard Financials i.e., Vanguard Financials and Calamos Global go up and down completely randomly.
Pair Corralation between Vanguard Financials and Calamos Global
Assuming the 90 days horizon Vanguard Financials Index is expected to under-perform the Calamos Global. In addition to that, Vanguard Financials is 1.01 times more volatile than Calamos Global Equity. It trades about -0.03 of its total potential returns per unit of risk. Calamos Global Equity is currently generating about 0.18 per unit of volatility. If you would invest 1,947 in Calamos Global Equity on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Calamos Global Equity or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Financials Index vs. Calamos Global Equity
Performance |
| Timeline |
| Vanguard Financials Index |
| Calamos Global Equity |
Vanguard Financials and Calamos Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Financials and Calamos Global
The main advantage of trading using opposite Vanguard Financials and Calamos Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Financials position performs unexpectedly, Calamos Global 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 Global will offset losses from the drop in Calamos Global's long position.The idea behind Vanguard Financials Index and Calamos Global Equity 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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