Correlation Between Calamos LongShort and Federated Premier

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

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

Diversification Opportunities for Calamos LongShort and Federated Premier

-0.45

Correlation Coefficient

Calamos LongShort  Federated Premier

Very good diversification

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

Pair Corralation between Calamos LongShort and Federated Premier

Considering the 90-day investment horizon Calamos LongShort Equity is expected to generate 0.96 times more return on investment than Federated Premier. However, Calamos LongShort Equity is 1.04 times less risky than Federated Premier. It trades about 0.1 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about -0.14 per unit of risk. If you would invest  1,507  in Calamos LongShort Equity on September 1, 2024 and sell it today you would earn a total of  63.00  from holding Calamos LongShort Equity or generate 4.18% return on investment over 90 days.

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

Calamos LongShort Equity  vs.  Federated Premier Municipal

Calamos LongShort Equity

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos LongShort Equity are ranked lower than 8 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Federated Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Premier Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy primary indicators, Federated Premier is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Calamos LongShort and Federated Premier

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

The idea behind Calamos LongShort Equity and Federated Premier Municipal 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.