Correlation Between Calamos Dividend and Vanguard Institutional

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

By analyzing existing cross correlation between Calamos Dividend Growth and Vanguard Institutional Index, you can compare the effects of market volatilities on Calamos Dividend and Vanguard Institutional 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 Calamos Dividend with a short position of Vanguard Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Dividend and Vanguard Institutional.

Diversification Opportunities for Calamos Dividend and Vanguard Institutional

0.91

Correlation Coefficient

Calamos Dividend  Vanguard Institutional

Almost no diversification

The 3 months correlation between Calamos and Vanguard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dividend Growth and Vanguard Institutional Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Institutional and Calamos Dividend 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 Calamos Dividend Growth are associated (or correlated) with Vanguard Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Institutional has no effect on the direction of Calamos Dividend i.e., Calamos Dividend and Vanguard Institutional go up and down completely randomly.

Pair Corralation between Calamos Dividend and Vanguard Institutional

Assuming the 90 days horizon Calamos Dividend Growth is expected to under-perform the Vanguard Institutional. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calamos Dividend Growth is 1.07 times less risky than Vanguard Institutional. The mutual fund trades about -0.28 of its potential returns per unit of risk. The Vanguard Institutional Index is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  50,194  in Vanguard Institutional Index on October 5, 2024 and sell it today you would lose (2,411) from holding Vanguard Institutional Index or give up 4.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Calamos Dividend Growth  vs.  Vanguard Institutional Index

Calamos Dividend Growth

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Dividend Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calamos Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Institutional

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Institutional Index are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Vanguard Institutional is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calamos Dividend and Vanguard Institutional

The main advantage of trading using opposite Calamos Dividend and Vanguard Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calamos Dividend position performs unexpectedly, Vanguard Institutional 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 Vanguard Institutional will offset losses from the drop in Vanguard Institutional's long position.

The idea behind Calamos Dividend Growth and Vanguard Institutional Index 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.