Correlation Between Nuveen Arizona and Calamos Short-term

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

By analyzing existing cross correlation between Nuveen Arizona Municipal and Calamos Short Term Bond, you can compare the effects of market volatilities on Nuveen Arizona and Calamos Short-term 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 Nuveen Arizona with a short position of Calamos Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Arizona and Calamos Short-term.

Diversification Opportunities for Nuveen Arizona and Calamos Short-term

0.31

Correlation Coefficient

Nuveen Arizona  Calamos Short-term

Weak diversification

The 3 months correlation between Nuveen and Calamos is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Calamos Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Short Term and Nuveen Arizona 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 Nuveen Arizona Municipal are associated (or correlated) with Calamos Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Short Term has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Calamos Short-term go up and down completely randomly.

Pair Corralation between Nuveen Arizona and Calamos Short-term

Assuming the 90 days horizon Nuveen Arizona Municipal is expected to under-perform the Calamos Short-term. In addition to that, Nuveen Arizona is 1.81 times more volatile than Calamos Short Term Bond. It trades about -0.06 of its total potential returns per unit of risk. Calamos Short Term Bond is currently generating about 0.2 per unit of volatility. If you would invest  939.00  in Calamos Short Term Bond on December 30, 2024 and sell it today you would earn a total of  16.00  from holding Calamos Short Term Bond or generate 1.7% return on investment over 90 days.

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

Nuveen Arizona Municipal  vs.  Calamos Short Term Bond

Nuveen Arizona Municipal

Risk-Adjusted Performance

Very Weak

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

Calamos Short Term

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Short Term Bond are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calamos Short-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Arizona and Calamos Short-term

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

The idea behind Nuveen Arizona Municipal and Calamos Short Term Bond 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.