Correlation Between Calamos Dynamic and Direxion Monthly

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

Diversification Opportunities for Calamos Dynamic and Direxion Monthly

0.89

Correlation Coefficient

Calamos Dynamic  Direxion Monthly

Very poor diversification

The 3 months correlation between Calamos and Direxion is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and Direxion Monthly Sp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Monthly 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 Direxion Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Monthly has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and Direxion Monthly go up and down completely randomly.

Pair Corralation between Calamos Dynamic and Direxion Monthly

Considering the 90-day investment horizon Calamos Dynamic Convertible is expected to generate 0.63 times more return on investment than Direxion Monthly. However, Calamos Dynamic Convertible is 1.58 times less risky than Direxion Monthly. It trades about -0.14 of its potential returns per unit of risk. Direxion Monthly Sp is currently generating about -0.09 per unit of risk. If you would invest  2,418  in Calamos Dynamic Convertible on December 22, 2024 and sell it today you would lose (225.00) from holding Calamos Dynamic Convertible or give up 9.31% of portfolio value over 90 days.

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

Calamos Dynamic Convertible  vs.  Direxion Monthly Sp

Calamos Dynamic Conv

Risk-Adjusted Performance

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 latest inconsistent performance, the Fund's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Direxion Monthly

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Monthly Sp has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Calamos Dynamic and Direxion Monthly

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

The idea behind Calamos Dynamic Convertible and Direxion Monthly Sp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.