Correlation Between Calamos Strategic and First Trust

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

By analyzing existing cross correlation between Calamos Strategic Total and First Trust Mortgage, you can compare the effects of market volatilities on Calamos Strategic and First Trust 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 Strategic with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Strategic and First Trust.

Diversification Opportunities for Calamos Strategic and First Trust

-0.46

Correlation Coefficient

Calamos Strategic  First Trust

Very good diversification

The 3 months correlation between Calamos and First is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Strategic Total and First Trust Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mortgage and Calamos Strategic 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 Strategic Total are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Mortgage has no effect on the direction of Calamos Strategic i.e., Calamos Strategic and First Trust go up and down completely randomly.

Pair Corralation between Calamos Strategic and First Trust

Considering the 90-day investment horizon Calamos Strategic Total is expected to generate 0.98 times more return on investment than First Trust. However, Calamos Strategic Total is 1.02 times less risky than First Trust. It trades about 0.23 of its potential returns per unit of risk. First Trust Mortgage is currently generating about 0.01 per unit of risk. If you would invest  1,636  in Calamos Strategic Total on September 4, 2024 and sell it today you would earn a total of  192.00  from holding Calamos Strategic Total or generate 11.74% return on investment over 90 days.

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

Calamos Strategic Total  vs.  First Trust Mortgage

Calamos Strategic Total

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Strategic Total are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively inconsistent basic indicators, Calamos Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

First Trust Mortgage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Trust Mortgage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, First Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calamos Strategic and First Trust

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

The idea behind Calamos Strategic Total and First Trust Mortgage 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.