Correlation Between Calamos Dynamic and Praxis Value

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

Diversification Opportunities for Calamos Dynamic and Praxis Value

0.31

Correlation Coefficient

Calamos Dynamic  Praxis Value

Weak diversification

The 3 months correlation between Calamos and Praxis is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and Praxis Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Value Index 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 Praxis Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Value Index has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and Praxis Value go up and down completely randomly.

Pair Corralation between Calamos Dynamic and Praxis Value

Considering the 90-day investment horizon Calamos Dynamic Convertible is expected to under-perform the Praxis Value. In addition to that, Calamos Dynamic is 1.48 times more volatile than Praxis Value Index. It trades about -0.18 of its total potential returns per unit of risk. Praxis Value Index is currently generating about 0.05 per unit of volatility. If you would invest  1,737  in Praxis Value Index on December 28, 2024 and sell it today you would earn a total of  38.00  from holding Praxis Value Index or generate 2.19% return on investment over 90 days.

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

Calamos Dynamic Convertible  vs.  Praxis Value Index

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.

Praxis Value Index

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Praxis Value Index are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Praxis Value 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 Praxis Value

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

The idea behind Calamos Dynamic Convertible and Praxis Value 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..