Correlation Between First Trust and Calamos Global

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

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

Diversification Opportunities for First Trust and Calamos Global

0.57

Correlation Coefficient

First Trust  Calamos Global

Very weak diversification

The 3 months correlation between First and Calamos is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Intermediate and Calamos Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Global Dynamic and First Trust 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 First Trust Intermediate are associated (or correlated) with Calamos Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Global Dynamic has no effect on the direction of First Trust i.e., First Trust and Calamos Global go up and down completely randomly.

Pair Corralation between First Trust and Calamos Global

Considering the 90-day investment horizon First Trust is expected to generate 1.8 times less return on investment than Calamos Global. But when comparing it to its historical volatility, First Trust Intermediate is 1.02 times less risky than Calamos Global. It trades about 0.05 of its potential returns per unit of risk. Calamos Global Dynamic is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  467.00  in Calamos Global Dynamic on September 26, 2024 and sell it today you would earn a total of  230.00  from holding Calamos Global Dynamic or generate 49.25% return on investment over 90 days.

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

First Trust Intermediate  vs.  Calamos Global Dynamic

First Trust Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Trust Intermediate has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, First Trust is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Calamos Global Dynamic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calamos Global Dynamic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable technical indicators, Calamos Global is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with First Trust and Calamos Global

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

The idea behind First Trust Intermediate and Calamos Global Dynamic 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.