Correlation Between T Rowe and Calamos Global

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

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

Diversification Opportunities for T Rowe and Calamos Global

0.57

Correlation Coefficient

T Rowe  Calamos Global

Very weak diversification

The 3 months correlation between PACEX and Calamos is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Calamos Global Vertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Global Vertible and T Rowe 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 T Rowe Price are associated (or correlated) with Calamos Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Global Vertible has no effect on the direction of T Rowe i.e., T Rowe and Calamos Global go up and down completely randomly.

Pair Corralation between T Rowe and Calamos Global

Assuming the 90 days horizon T Rowe Price is expected to under-perform the Calamos Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, T Rowe Price is 3.41 times less risky than Calamos Global. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Calamos Global Vertible is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  1,208  in Calamos Global Vertible on September 5, 2024 and sell it today you would earn a total of  41.00  from holding Calamos Global Vertible or generate 3.39% return on investment over 90 days.

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

T Rowe Price  vs.  Calamos Global Vertible

T Rowe Price

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, T Rowe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calamos Global Vertible

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Global Vertible are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Calamos Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with T Rowe and Calamos Global

The main advantage of trading using opposite T Rowe and Calamos Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Calamos Global 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 Global will offset losses from the drop in Calamos Global's long position.

The idea behind T Rowe Price and Calamos Global Vertible 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.