Correlation Between Gabelli Dividend and Calamos Convertible

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

By analyzing existing cross correlation between Gabelli Dividend Income and Calamos Convertible And, you can compare the effects of market volatilities on Gabelli Dividend and Calamos Convertible 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 Gabelli Dividend with a short position of Calamos Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Dividend and Calamos Convertible.

Diversification Opportunities for Gabelli Dividend and Calamos Convertible

0.91

Correlation Coefficient

Gabelli Dividend  Calamos Convertible

Almost no diversification

The 3 months correlation between Gabelli and Calamos is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Dividend Income and Calamos Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Convertible And and Gabelli Dividend 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 Gabelli Dividend Income are associated (or correlated) with Calamos Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Convertible And has no effect on the direction of Gabelli Dividend i.e., Gabelli Dividend and Calamos Convertible go up and down completely randomly.

Pair Corralation between Gabelli Dividend and Calamos Convertible

Considering the 90-day investment horizon Gabelli Dividend is expected to generate 1.07 times less return on investment than Calamos Convertible. But when comparing it to its historical volatility, Gabelli Dividend Income is 1.31 times less risky than Calamos Convertible. It trades about 0.2 of its potential returns per unit of risk. Calamos Convertible And is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,124  in Calamos Convertible And on September 4, 2024 and sell it today you would earn a total of  100.00  from holding Calamos Convertible And or generate 8.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Gabelli Dividend Income  vs.  Calamos Convertible And

Gabelli Dividend Income

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Dividend Income are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly uncertain fundamental indicators, Gabelli Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Calamos Convertible And

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Convertible And are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal technical indicators, Calamos Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Dividend and Calamos Convertible

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

The idea behind Gabelli Dividend Income and Calamos Convertible And 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.