Correlation Between The Arbitrage and Calamos Market

Can any of the company-specific risk be diversified away by investing in both The Arbitrage 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 The Arbitrage and Calamos Market into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Arbitrage Fund and Calamos Market Neutral, you can compare the effects of market volatilities on The Arbitrage 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 The Arbitrage with a short position of Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and Calamos Market.

Diversification Opportunities for The Arbitrage and Calamos Market

-0.12

Correlation Coefficient

The Arbitrage  Calamos Market

Good diversification

The 3 months correlation between The and Calamos is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund 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 The Arbitrage 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 The Arbitrage Fund 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 The Arbitrage i.e., The Arbitrage and Calamos Market go up and down completely randomly.

Pair Corralation between The Arbitrage and Calamos Market

Assuming the 90 days horizon The Arbitrage Fund is expected to generate 0.91 times more return on investment than Calamos Market. However, The Arbitrage Fund is 1.1 times less risky than Calamos Market. It trades about 0.08 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about -0.18 per unit of risk. If you would invest  1,292  in The Arbitrage Fund on October 15, 2024 and sell it today you would earn a total of  4.00  from holding The Arbitrage Fund or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Arbitrage Fund  vs.  Calamos Market Neutral

The Arbitrage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Arbitrage Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, The Arbitrage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calamos Market Neutral

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Market Neutral are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calamos Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with The Arbitrage and Calamos Market

The main advantage of trading using opposite The Arbitrage and Calamos Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage 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 The Arbitrage Fund 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.