Correlation Between GM and Calamos Short

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

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

Diversification Opportunities for GM and Calamos Short

0.0

Correlation Coefficient

GM  Calamos Short

Pay attention - limited upside

The 3 months correlation between GM and Calamos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors 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 GM 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 General Motors are associated (or correlated) with Calamos Short. 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 GM i.e., GM and Calamos Short go up and down completely randomly.

Pair Corralation between GM and Calamos Short

If you would invest  0.00  in Calamos Short Term Bond on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Calamos Short Term Bond or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

General Motors  vs.  Calamos Short Term Bond

General Motors

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, GM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Calamos Short Term

Risk-Adjusted Performance

Good

Over the last 90 days Calamos Short Term Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Calamos Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GM and Calamos Short

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

The idea behind General Motors 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.