Correlation Between Nexpoint Real and Calamos Vertible

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

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

Diversification Opportunities for Nexpoint Real and Calamos Vertible

0.25

Correlation Coefficient

Nexpoint Real  Calamos Vertible

Modest diversification

The 3 months correlation between Nexpoint and Calamos is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Real Estate and Calamos Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Vertible and Nexpoint Real 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 Nexpoint Real Estate are associated (or correlated) with Calamos Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Vertible has no effect on the direction of Nexpoint Real i.e., Nexpoint Real and Calamos Vertible go up and down completely randomly.

Pair Corralation between Nexpoint Real and Calamos Vertible

Assuming the 90 days horizon Nexpoint Real Estate is expected to under-perform the Calamos Vertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nexpoint Real Estate is 1.48 times less risky than Calamos Vertible. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Calamos Vertible Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,150  in Calamos Vertible Fund on October 26, 2024 and sell it today you would earn a total of  87.00  from holding Calamos Vertible Fund or generate 4.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Nexpoint Real Estate  vs.  Calamos Vertible Fund

Nexpoint Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Calamos Vertible

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Vertible Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calamos Vertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nexpoint Real and Calamos Vertible

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

The idea behind Nexpoint Real Estate and Calamos Vertible Fund 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.