Correlation Between Microsoft and Calamos Opportunistic

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

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

Diversification Opportunities for Microsoft and Calamos Opportunistic

0.08

Correlation Coefficient

Microsoft  Calamos Opportunistic

Significant diversification

The 3 months correlation between Microsoft and Calamos is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Calamos Opportunistic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Opportunistic and Microsoft 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 Microsoft are associated (or correlated) with Calamos Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Opportunistic has no effect on the direction of Microsoft i.e., Microsoft and Calamos Opportunistic go up and down completely randomly.

Pair Corralation between Microsoft and Calamos Opportunistic

Given the investment horizon of 90 days Microsoft is expected to generate 2.18 times less return on investment than Calamos Opportunistic. In addition to that, Microsoft is 1.7 times more volatile than Calamos Opportunistic Value. It trades about 0.05 of its total potential returns per unit of risk. Calamos Opportunistic Value is currently generating about 0.18 per unit of volatility. If you would invest  1,740  in Calamos Opportunistic Value on September 3, 2024 and sell it today you would earn a total of  159.00  from holding Calamos Opportunistic Value or generate 9.14% return on investment over 90 days.

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

Microsoft  vs.  Calamos Opportunistic Value

Microsoft

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Calamos Opportunistic

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Opportunistic Value are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Calamos Opportunistic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Microsoft and Calamos Opportunistic

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

The idea behind Microsoft and Calamos Opportunistic Value 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.