Correlation Between Invesco Gold and Calamos Evolving

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

By analyzing existing cross correlation between Invesco Gold Special and Calamos Evolving World, you can compare the effects of market volatilities on Invesco Gold and Calamos Evolving 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 Invesco Gold with a short position of Calamos Evolving. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Calamos Evolving.

Diversification Opportunities for Invesco Gold and Calamos Evolving

0.74

Correlation Coefficient

Invesco Gold  Calamos Evolving

Poor diversification

The 3 months correlation between Invesco and Calamos is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Calamos Evolving World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Evolving World and Invesco Gold 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 Invesco Gold Special are associated (or correlated) with Calamos Evolving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Evolving World has no effect on the direction of Invesco Gold i.e., Invesco Gold and Calamos Evolving go up and down completely randomly.

Pair Corralation between Invesco Gold and Calamos Evolving

Assuming the 90 days horizon Invesco Gold Special is expected to under-perform the Calamos Evolving. In addition to that, Invesco Gold is 2.54 times more volatile than Calamos Evolving World. It trades about -0.12 of its total potential returns per unit of risk. Calamos Evolving World is currently generating about -0.13 per unit of volatility. If you would invest  1,811  in Calamos Evolving World on September 4, 2024 and sell it today you would lose (41.00) from holding Calamos Evolving World or give up 2.26% of portfolio value over 90 days.

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

Invesco Gold Special  vs.  Calamos Evolving World

Invesco Gold Special

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Gold Special are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Calamos Evolving World

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Evolving World are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calamos Evolving is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Gold and Calamos Evolving

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

The idea behind Invesco Gold Special and Calamos Evolving World 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.