Correlation Between Calamos Dynamic and American Funds

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

By analyzing existing cross correlation between Calamos Dynamic Convertible and American Funds 2055, you can compare the effects of market volatilities on Calamos Dynamic and American Funds 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 Dynamic with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Dynamic and American Funds.

Diversification Opportunities for Calamos Dynamic and American Funds

-0.2

Correlation Coefficient

Calamos Dynamic  American Funds

Good diversification

The 3 months correlation between Calamos and American is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and American Funds 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2055 and Calamos Dynamic 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 Dynamic Convertible are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2055 has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and American Funds go up and down completely randomly.

Pair Corralation between Calamos Dynamic and American Funds

Considering the 90-day investment horizon Calamos Dynamic Convertible is expected to generate 1.23 times more return on investment than American Funds. However, Calamos Dynamic is 1.23 times more volatile than American Funds 2055. It trades about -0.07 of its potential returns per unit of risk. American Funds 2055 is currently generating about -0.08 per unit of risk. If you would invest  2,459  in Calamos Dynamic Convertible on October 22, 2024 and sell it today you would lose (32.00) from holding Calamos Dynamic Convertible or give up 1.3% of portfolio value over 90 days.

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

Calamos Dynamic Convertible  vs.  American Funds 2055

Calamos Dynamic Conv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calamos Dynamic Convertible has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound fundamental indicators, Calamos Dynamic is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

American Funds 2055

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Funds 2055 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, American Funds 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 Dynamic and American Funds

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

The idea behind Calamos Dynamic Convertible and American Funds 2055 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.