Correlation Between Calamos Global and Metropolitan West

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

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

Diversification Opportunities for Calamos Global and Metropolitan West

0.64

Correlation Coefficient

Calamos Global  Metropolitan West

Poor diversification

The 3 months correlation between Calamos and Metropolitan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Global Equity and Metropolitan West Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Porate and Calamos Global 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 Global Equity are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Porate has no effect on the direction of Calamos Global i.e., Calamos Global and Metropolitan West go up and down completely randomly.

Pair Corralation between Calamos Global and Metropolitan West

Assuming the 90 days horizon Calamos Global is expected to generate 7.3 times less return on investment than Metropolitan West. But when comparing it to its historical volatility, Calamos Global Equity is 18.4 times less risky than Metropolitan West. It trades about 0.12 of its potential returns per unit of risk. Metropolitan West Porate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  804.00  in Metropolitan West Porate on September 12, 2024 and sell it today you would earn a total of  3,721  from holding Metropolitan West Porate or generate 462.81% return on investment over 90 days.

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

Calamos Global Equity  vs.  Metropolitan West Porate

Calamos Global Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Global Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calamos Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Metropolitan West Porate

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metropolitan West Porate are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Metropolitan West showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calamos Global and Metropolitan West

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

The idea behind Calamos Global Equity and Metropolitan West Porate 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.