Correlation Between Calamos Global and NXG NextGen

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

By analyzing existing cross correlation between Calamos Global Total and NXG NextGen Infrastructure, you can compare the effects of market volatilities on Calamos Global and NXG NextGen 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 Global with a short position of NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Global and NXG NextGen.

Diversification Opportunities for Calamos Global and NXG NextGen

-0.21

Correlation Coefficient

Calamos Global  NXG NextGen

Very good diversification

The 3 months correlation between Calamos and NXG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Global Total and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr and Calamos Global 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 Global Total are associated (or correlated) with NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Calamos Global i.e., Calamos Global and NXG NextGen go up and down completely randomly.

Pair Corralation between Calamos Global and NXG NextGen

Considering the 90-day investment horizon Calamos Global Total is expected to under-perform the NXG NextGen. But the fund apears to be less risky and, when comparing its historical volatility, Calamos Global Total is 2.38 times less risky than NXG NextGen. The fund trades about -0.11 of its potential returns per unit of risk. The NXG NextGen Infrastructure is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,256  in NXG NextGen Infrastructure on December 27, 2024 and sell it today you would earn a total of  565.00  from holding NXG NextGen Infrastructure or generate 13.28% return on investment over 90 days.

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

Calamos Global Total  vs.  NXG NextGen Infrastructure

Calamos Global Total

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Global Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Calamos Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

NXG NextGen Infrastr

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NXG NextGen Infrastructure are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, NXG NextGen reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calamos Global and NXG NextGen

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

The idea behind Calamos Global Total and NXG NextGen Infrastructure 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.