Correlation Between Kinetics Market and Calamos Market

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

By analyzing existing cross correlation between Kinetics Market Opportunities and Calamos Market Neutral, you can compare the effects of market volatilities on Kinetics Market and Calamos Market 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 Kinetics Market with a short position of Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Calamos Market.

Diversification Opportunities for Kinetics Market and Calamos Market

0.88

Correlation Coefficient

Kinetics Market  Calamos Market

Very poor diversification

The 3 months correlation between Kinetics and Calamos is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral and Kinetics Market 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 Kinetics Market Opportunities are associated (or correlated) with Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Kinetics Market i.e., Kinetics Market and Calamos Market go up and down completely randomly.

Pair Corralation between Kinetics Market and Calamos Market

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 20.8 times more return on investment than Calamos Market. However, Kinetics Market is 20.8 times more volatile than Calamos Market Neutral. It trades about 0.41 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.33 per unit of risk. If you would invest  5,357  in Kinetics Market Opportunities on September 3, 2024 and sell it today you would earn a total of  3,612  from holding Kinetics Market Opportunities or generate 67.43% return on investment over 90 days.

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

Kinetics Market Opportunities  vs.  Calamos Market Neutral

Kinetics Market Oppo

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Calamos Market Neutral

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Market Neutral are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calamos Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kinetics Market and Calamos Market

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

The idea behind Kinetics Market Opportunities and Calamos Market Neutral 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.