Correlation Between Westwood Alternative and Calamos Market
Can any of the company-specific risk be diversified away by investing in both Westwood Alternative 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 Westwood Alternative and Calamos Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Alternative Income and Calamos Market Neutral, you can compare the effects of market volatilities on Westwood Alternative 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 Westwood Alternative with a short position of Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Alternative and Calamos Market.
Diversification Opportunities for Westwood Alternative and Calamos Market
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Westwood and Calamos is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Alternative Income 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 Westwood Alternative 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 Westwood Alternative Income 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 Westwood Alternative i.e., Westwood Alternative and Calamos Market go up and down completely randomly.
Pair Corralation between Westwood Alternative and Calamos Market
Assuming the 90 days horizon Westwood Alternative Income is expected to generate 0.88 times more return on investment than Calamos Market. However, Westwood Alternative Income is 1.14 times less risky than Calamos Market. It trades about 0.36 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.31 per unit of risk. If you would invest 953.00 in Westwood Alternative Income on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Westwood Alternative Income or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Alternative Income vs. Calamos Market Neutral
Performance |
| Timeline |
| Westwood Alternative |
| Calamos Market Neutral |
Westwood Alternative and Calamos Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Alternative and Calamos Market
The main advantage of trading using opposite Westwood Alternative and Calamos Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Alternative 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.| Westwood Alternative vs. Westwood Short Duration | Westwood Alternative vs. Westwood High Income | Westwood Alternative vs. Westwood Income Opportunity | Westwood Alternative vs. Westwood Income Opportunity |
| Calamos Market vs. Fidelity Series Government | Calamos Market vs. Franklin Government Money | Calamos Market vs. John Hancock Government | Calamos Market vs. Virtus Seix Government |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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