Correlation Between Vanguard Short-term and Calamos Market
Can any of the company-specific risk be diversified away by investing in both Vanguard Short-term and Calamos Market 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 Short-term and Calamos Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Short Term Government and Calamos Market Neutral, you can compare the effects of market volatilities on Vanguard Short-term and Calamos Market 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 Short-term with a short position of Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short-term and Calamos Market.
Diversification Opportunities for Vanguard Short-term and Calamos Market
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between VANGUARD and Calamos is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Government and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral and Vanguard Short-term 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 Short Term Government are associated (or correlated) with Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Vanguard Short-term i.e., Vanguard Short-term and Calamos Market go up and down completely randomly.
Pair Corralation between Vanguard Short-term and Calamos Market
Assuming the 90 days horizon Vanguard Short Term Government is expected to generate 0.46 times more return on investment than Calamos Market. However, Vanguard Short Term Government is 2.19 times less risky than Calamos Market. It trades about 0.15 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.07 per unit of risk. If you would invest 1,859 in Vanguard Short Term Government on August 25, 2024 and sell it today you would earn a total of 83.00 from holding Vanguard Short Term Government or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Short Term Government vs. Calamos Market Neutral
Performance |
| Timeline |
| Vanguard Short Term |
| Calamos Market Neutral |
Vanguard Short-term and Calamos Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Short-term and Calamos Market
The main advantage of trading using opposite Vanguard Short-term and Calamos Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short-term position performs unexpectedly, Calamos Market 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 Market will offset losses from the drop in Calamos Market's long position.The idea behind Vanguard Short Term Government and Calamos Market Neutral 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 Market vs. Gamco Global Telecommunications | Calamos Market vs. Vanguard Short Term Government | Calamos Market vs. Counterpoint Tactical Municipal | Calamos Market vs. Pace Municipal Fixed |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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