Correlation Between Calamos Convertible and Calamos LongShort

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

By analyzing existing cross correlation between Calamos Convertible Opportunities and Calamos LongShort Equity, you can compare the effects of market volatilities on Calamos Convertible and Calamos LongShort 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 Convertible with a short position of Calamos LongShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Convertible and Calamos LongShort.

Diversification Opportunities for Calamos Convertible and Calamos LongShort

-0.73

Correlation Coefficient

Calamos Convertible  Calamos LongShort

Pay attention - limited upside

The 3 months correlation between Calamos and Calamos is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Convertible Opportunit and Calamos LongShort Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos LongShort Equity and Calamos Convertible 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 Convertible Opportunities are associated (or correlated) with Calamos LongShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos LongShort Equity has no effect on the direction of Calamos Convertible i.e., Calamos Convertible and Calamos LongShort go up and down completely randomly.

Pair Corralation between Calamos Convertible and Calamos LongShort

Considering the 90-day investment horizon Calamos Convertible Opportunities is expected to under-perform the Calamos LongShort. In addition to that, Calamos Convertible is 1.4 times more volatile than Calamos LongShort Equity. It trades about -0.22 of its total potential returns per unit of risk. Calamos LongShort Equity is currently generating about 0.04 per unit of volatility. If you would invest  1,507  in Calamos LongShort Equity on November 29, 2024 and sell it today you would earn a total of  25.00  from holding Calamos LongShort Equity or generate 1.66% return on investment over 90 days.

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

Calamos Convertible Opportunit  vs.  Calamos LongShort Equity

Calamos Convertible

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Convertible Opportunities has generated negative risk-adjusted returns adding no value to fund investors. Despite unsteady performance in the last few months, the Fund's technical indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the fund traders.

Calamos LongShort Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos LongShort Equity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Calamos LongShort is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calamos Convertible and Calamos LongShort

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

The idea behind Calamos Convertible Opportunities and Calamos LongShort Equity 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.