Correlation Between Calamos Global and Putnam High

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

By analyzing existing cross correlation between Calamos Global Dynamic and Putnam High Income, you can compare the effects of market volatilities on Calamos Global and Putnam High 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 Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Global and Putnam High.

Diversification Opportunities for Calamos Global and Putnam High

0.45

Correlation Coefficient

Calamos Global  Putnam High

Very weak diversification

The 3 months correlation between Calamos and Putnam is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Global Dynamic and Putnam High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Income 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 Dynamic are associated (or correlated) with Putnam High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam High Income has no effect on the direction of Calamos Global i.e., Calamos Global and Putnam High go up and down completely randomly.

Pair Corralation between Calamos Global and Putnam High

Considering the 90-day investment horizon Calamos Global Dynamic is expected to generate 1.03 times more return on investment than Putnam High. However, Calamos Global is 1.03 times more volatile than Putnam High Income. It trades about -0.05 of its potential returns per unit of risk. Putnam High Income is currently generating about -0.21 per unit of risk. If you would invest  696.00  in Calamos Global Dynamic on September 24, 2024 and sell it today you would lose (6.00) from holding Calamos Global Dynamic or give up 0.86% of portfolio value over 90 days.

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

Calamos Global Dynamic  vs.  Putnam High Income

Calamos Global Dynamic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calamos Global Dynamic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable technical indicators, Calamos Global is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Putnam High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam High Income has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable fundamental indicators, Putnam High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Calamos Global and Putnam High

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

The idea behind Calamos Global Dynamic and Putnam High Income 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.