Correlation Between Victory Diversified and Calamos Dynamic

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

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

Diversification Opportunities for Victory Diversified and Calamos Dynamic

0.92

Correlation Coefficient

Victory Diversified  Calamos Dynamic

Almost no diversification

The 3 months correlation between Victory and Calamos is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Victory Diversified Stock and Calamos Dynamic Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Dynamic Conv and Victory Diversified 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 Victory Diversified Stock are associated (or correlated) with Calamos Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Dynamic Conv has no effect on the direction of Victory Diversified i.e., Victory Diversified and Calamos Dynamic go up and down completely randomly.

Pair Corralation between Victory Diversified and Calamos Dynamic

Assuming the 90 days horizon Victory Diversified Stock is expected to generate 0.98 times more return on investment than Calamos Dynamic. However, Victory Diversified Stock is 1.02 times less risky than Calamos Dynamic. It trades about -0.06 of its potential returns per unit of risk. Calamos Dynamic Convertible is currently generating about -0.19 per unit of risk. If you would invest  1,831  in Victory Diversified Stock on December 28, 2024 and sell it today you would lose (76.00) from holding Victory Diversified Stock or give up 4.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Victory Diversified Stock  vs.  Calamos Dynamic Convertible

Victory Diversified Stock

Risk-Adjusted Performance

Very Weak

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

Calamos Dynamic Conv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Dynamic Convertible has generated negative risk-adjusted returns adding no value to fund investors. In spite of inconsistent performance in the last few months, the Fund's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with Victory Diversified and Calamos Dynamic

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

The idea behind Victory Diversified Stock and Calamos Dynamic Convertible 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.