Correlation Between Calamos Dynamic and Federated Strategic

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

Diversification Opportunities for Calamos Dynamic and Federated Strategic

-0.39

Correlation Coefficient

Calamos Dynamic  Federated Strategic

Very good diversification

The 3 months correlation between Calamos and Federated is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and Federated Strategic go up and down completely randomly.

Pair Corralation between Calamos Dynamic and Federated Strategic

Considering the 90-day investment horizon Calamos Dynamic Convertible is expected to under-perform the Federated Strategic. In addition to that, Calamos Dynamic is 1.59 times more volatile than Federated Strategic Value. It trades about -0.19 of its total potential returns per unit of risk. Federated Strategic Value is currently generating about 0.15 per unit of volatility. If you would invest  584.00  in Federated Strategic Value on December 30, 2024 and sell it today you would earn a total of  38.00  from holding Federated Strategic Value or generate 6.51% return on investment over 90 days.

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

Calamos Dynamic Convertible  vs.  Federated Strategic Value

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 inconsistent performance in the last few months, the Fund's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Federated Strategic Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Strategic Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Federated Strategic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Calamos Dynamic and Federated Strategic

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

The idea behind Calamos Dynamic Convertible and Federated Strategic Value 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.