Correlation Between Balanced Fund and Calamos Vertible

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

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

Diversification Opportunities for Balanced Fund and Calamos Vertible

0.76

Correlation Coefficient

Balanced Fund  Calamos Vertible

Poor diversification

The 3 months correlation between Balanced and Calamos is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Calamos Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Vertible and Balanced Fund 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 Balanced Fund Investor 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 Balanced Fund i.e., Balanced Fund and Calamos Vertible go up and down completely randomly.

Pair Corralation between Balanced Fund and Calamos Vertible

Assuming the 90 days horizon Balanced Fund Investor is expected to generate 0.84 times more return on investment than Calamos Vertible. However, Balanced Fund Investor is 1.2 times less risky than Calamos Vertible. It trades about -0.07 of its potential returns per unit of risk. Calamos Vertible Fund is currently generating about -0.2 per unit of risk. If you would invest  2,020  in Balanced Fund Investor on September 27, 2024 and sell it today you would lose (18.00) from holding Balanced Fund Investor or give up 0.89% of portfolio value over 90 days.

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

Balanced Fund Investor  vs.  Calamos Vertible Fund

Balanced Fund Investor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balanced Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Balanced Fund 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

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Vertible Fund are ranked lower than 7 (%) 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 Balanced Fund and Calamos Vertible

The main advantage of trading using opposite Balanced Fund and Calamos Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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 Balanced Fund Investor 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..