Correlation Between NVIDIA and Calamos Dividend

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

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

Diversification Opportunities for NVIDIA and Calamos Dividend

0.39

Correlation Coefficient

NVIDIA  Calamos Dividend

Weak diversification

The 3 months correlation between NVIDIA and Calamos is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Calamos Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Dividend Growth and NVIDIA 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 NVIDIA are associated (or correlated) with Calamos Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Dividend Growth has no effect on the direction of NVIDIA i.e., NVIDIA and Calamos Dividend go up and down completely randomly.

Pair Corralation between NVIDIA and Calamos Dividend

Given the investment horizon of 90 days NVIDIA is expected to generate 3.94 times more return on investment than Calamos Dividend. However, NVIDIA is 3.94 times more volatile than Calamos Dividend Growth. It trades about 0.15 of its potential returns per unit of risk. Calamos Dividend Growth is currently generating about 0.08 per unit of risk. If you would invest  1,769  in NVIDIA on October 5, 2024 and sell it today you would earn a total of  12,062  from holding NVIDIA or generate 681.85% return on investment over 90 days.

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

NVIDIA  vs.  Calamos Dividend Growth

NVIDIA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Calamos Dividend Growth

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Dividend Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calamos Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NVIDIA and Calamos Dividend

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

The idea behind NVIDIA and Calamos Dividend Growth 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.