Correlation Between Calamos Market and Northern Institutional

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

By analyzing existing cross correlation between Calamos Market Neutral and Northern Institutional Funds, you can compare the effects of market volatilities on Calamos Market and Northern Institutional 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 Market with a short position of Northern Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Market and Northern Institutional.

Diversification Opportunities for Calamos Market and Northern Institutional

0.43

Correlation Coefficient

Calamos Market  Northern Institutional

Very weak diversification

The 3 months correlation between Calamos and Northern is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Market Neutral and Northern Institutional Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Institutional and Calamos Market 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 Market Neutral are associated (or correlated) with Northern Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Institutional has no effect on the direction of Calamos Market i.e., Calamos Market and Northern Institutional go up and down completely randomly.

Pair Corralation between Calamos Market and Northern Institutional

If you would invest  100.00  in Northern Institutional Funds on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Northern Institutional Funds or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Calamos Market Neutral  vs.  Northern Institutional Funds

Calamos Market Neutral

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Market Neutral are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calamos Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Northern Institutional

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Institutional Funds are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Northern Institutional 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 Market and Northern Institutional

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

The idea behind Calamos Market Neutral and Northern Institutional Funds 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.