Correlation Between Calamos Dynamic and Power Momentum

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

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

Diversification Opportunities for Calamos Dynamic and Power Momentum

-0.15

Correlation Coefficient

Calamos Dynamic  Power Momentum

Good diversification

The 3 months correlation between Calamos and Power is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and Power Momentum Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Momentum Index and Calamos Dynamic 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 Calamos Dynamic Convertible are associated (or correlated) with Power Momentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Momentum Index has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and Power Momentum go up and down completely randomly.

Pair Corralation between Calamos Dynamic and Power Momentum

Considering the 90-day investment horizon Calamos Dynamic is expected to generate 4.84 times less return on investment than Power Momentum. In addition to that, Calamos Dynamic is 1.24 times more volatile than Power Momentum Index. It trades about 0.02 of its total potential returns per unit of risk. Power Momentum Index is currently generating about 0.13 per unit of volatility. If you would invest  1,390  in Power Momentum Index on September 13, 2024 and sell it today you would earn a total of  92.00  from holding Power Momentum Index or generate 6.62% return on investment over 90 days.

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

Calamos Dynamic Convertible  vs.  Power Momentum Index

Calamos Dynamic Conv

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Dynamic Convertible are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound fundamental indicators, Calamos Dynamic is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Power Momentum Index

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Power Momentum Index are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Power Momentum may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Calamos Dynamic and Power Momentum

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

The idea behind Calamos Dynamic Convertible and Power Momentum Index 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.