Correlation Between Calamos Opportunistic and Innealta Capital

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

By analyzing existing cross correlation between Calamos Opportunistic Value and Innealta Capital Sector, you can compare the effects of market volatilities on Calamos Opportunistic and Innealta Capital 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 Opportunistic with a short position of Innealta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Opportunistic and Innealta Capital.

Diversification Opportunities for Calamos Opportunistic and Innealta Capital

0.99

Correlation Coefficient

Calamos Opportunistic  Innealta Capital

No risk reduction

The 3 months correlation between Calamos and Innealta is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Opportunistic Value and Innealta Capital Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innealta Capital Sector and Calamos Opportunistic 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 Opportunistic Value are associated (or correlated) with Innealta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innealta Capital Sector has no effect on the direction of Calamos Opportunistic i.e., Calamos Opportunistic and Innealta Capital go up and down completely randomly.

Pair Corralation between Calamos Opportunistic and Innealta Capital

Assuming the 90 days horizon Calamos Opportunistic Value is expected to under-perform the Innealta Capital. In addition to that, Calamos Opportunistic is 1.18 times more volatile than Innealta Capital Sector. It trades about -0.09 of its total potential returns per unit of risk. Innealta Capital Sector is currently generating about -0.1 per unit of volatility. If you would invest  1,259  in Innealta Capital Sector on December 30, 2024 and sell it today you would lose (72.00) from holding Innealta Capital Sector or give up 5.72% of portfolio value over 90 days.

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

Calamos Opportunistic Value  vs.  Innealta Capital Sector

Calamos Opportunistic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Opportunistic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Innealta Capital Sector

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innealta Capital Sector has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Innealta Capital 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 Opportunistic and Innealta Capital

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

The idea behind Calamos Opportunistic Value and Innealta Capital Sector 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.