Correlation Between Bank of America and Calamos Market
Can any of the company-specific risk be diversified away by investing in both Bank of America 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 Bank of America and Calamos Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Calamos Market Neutral, you can compare the effects of market volatilities on Bank of America 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 Bank of America with a short position of Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Calamos Market.
Diversification Opportunities for Bank of America and Calamos Market
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Calamos is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America 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 Bank of America 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 Bank of America 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 Bank of America i.e., Bank of America and Calamos Market go up and down completely randomly.
Pair Corralation between Bank of America and Calamos Market
Considering the 90-day investment horizon Bank of America is expected to under-perform the Calamos Market. In addition to that, Bank of America is 15.1 times more volatile than Calamos Market Neutral. It trades about -0.01 of its total potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.27 per unit of volatility. If you would invest 1,510 in Calamos Market Neutral on December 1, 2024 and sell it today you would earn a total of 21.00 from holding Calamos Market Neutral or generate 1.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of America vs. Calamos Market Neutral
Performance |
Timeline |
Bank of America |
Calamos Market Neutral |
Bank of America and Calamos Market Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of America and Calamos Market
The main advantage of trading using opposite Bank of America and Calamos Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America 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.Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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