Correlation Between Calamos Dynamic and Capital World

Can any of the company-specific risk be diversified away by investing in both Calamos Dynamic and Capital World 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 Capital World 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 Capital World Growth, you can compare the effects of market volatilities on Calamos Dynamic and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Dynamic and Capital World.

Diversification Opportunities for Calamos Dynamic and Capital World

0.03

Correlation Coefficient

Calamos Dynamic  Capital World

Significant diversification

The 3 months correlation between Calamos and Capital is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and Capital World Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Growth 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Growth has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and Capital World go up and down completely randomly.

Pair Corralation between Calamos Dynamic and Capital World

Considering the 90-day investment horizon Calamos Dynamic Convertible is expected to generate 0.53 times more return on investment than Capital World. However, Calamos Dynamic Convertible is 1.89 times less risky than Capital World. It trades about 0.08 of its potential returns per unit of risk. Capital World Growth is currently generating about -0.19 per unit of risk. If you would invest  2,431  in Calamos Dynamic Convertible on September 23, 2024 and sell it today you would earn a total of  34.00  from holding Calamos Dynamic Convertible or generate 1.4% return on investment over 90 days.

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

Calamos Dynamic Convertible  vs.  Capital World Growth

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Capital World Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital World Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Capital World 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 Capital World

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

The idea behind Calamos Dynamic Convertible and Capital World Growth 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.