Correlation Between Calamos Market and American Independence

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

Diversification Opportunities for Calamos Market and American Independence

0.5

Correlation Coefficient

Calamos Market  American Independence

Very weak diversification

The 3 months correlation between Calamos and American is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Market Neutral and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence 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 American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Calamos Market i.e., Calamos Market and American Independence go up and down completely randomly.

Pair Corralation between Calamos Market and American Independence

Assuming the 90 days horizon Calamos Market Neutral is expected to generate 2.15 times more return on investment than American Independence. However, Calamos Market is 2.15 times more volatile than American Independence Kansas. It trades about 0.05 of its potential returns per unit of risk. American Independence Kansas is currently generating about 0.02 per unit of risk. If you would invest  1,358  in Calamos Market Neutral on October 13, 2024 and sell it today you would earn a total of  138.00  from holding Calamos Market Neutral or generate 10.16% return on investment over 90 days.

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

Calamos Market Neutral  vs.  American Independence Kansas

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.

American Independence

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Independence Kansas has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, American Independence 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 American Independence

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

The idea behind Calamos Market Neutral and American Independence Kansas 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 Managers module to screen money managers from public funds and ETFs managed around the world.