Correlation Between Federated Premier and Calamos Strategic

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

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

Diversification Opportunities for Federated Premier and Calamos Strategic

-0.64

Correlation Coefficient

Federated Premier  Calamos Strategic

Excellent diversification

The 3 months correlation between Federated and Calamos is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Calamos Strategic Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Strategic Total and Federated Premier 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 Federated Premier Municipal are associated (or correlated) with Calamos Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Strategic Total has no effect on the direction of Federated Premier i.e., Federated Premier and Calamos Strategic go up and down completely randomly.

Pair Corralation between Federated Premier and Calamos Strategic

Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Calamos Strategic. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 1.15 times less risky than Calamos Strategic. The fund trades about -0.15 of its potential returns per unit of risk. The Calamos Strategic Total is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,638  in Calamos Strategic Total on August 31, 2024 and sell it today you would earn a total of  167.00  from holding Calamos Strategic Total or generate 10.2% return on investment over 90 days.

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

Federated Premier Municipal  vs.  Calamos Strategic Total

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.

Calamos Strategic Total

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Strategic Total are ranked lower than 16 (%) 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 December 2024.

Pair Trading with Federated Premier and Calamos Strategic

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

The idea behind Federated Premier Municipal and Calamos Strategic Total 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.