Correlation Between Gabelli Global and Calamos Convertible

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

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

Diversification Opportunities for Gabelli Global and Calamos Convertible

0.88

Correlation Coefficient

Gabelli Global  Calamos Convertible

Very poor diversification

The 3 months correlation between Gabelli and Calamos is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small and Calamos Convertible Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Convertible and Gabelli 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 Gabelli Global Small are associated (or correlated) with Calamos Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Convertible has no effect on the direction of Gabelli Global i.e., Gabelli Global and Calamos Convertible go up and down completely randomly.

Pair Corralation between Gabelli Global and Calamos Convertible

Considering the 90-day investment horizon Gabelli Global Small is expected to generate 1.05 times more return on investment than Calamos Convertible. However, Gabelli Global is 1.05 times more volatile than Calamos Convertible Opportunities. It trades about 0.14 of its potential returns per unit of risk. Calamos Convertible Opportunities is currently generating about 0.08 per unit of risk. If you would invest  1,111  in Gabelli Global Small on September 12, 2024 and sell it today you would earn a total of  198.00  from holding Gabelli Global Small or generate 17.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.2%
Values	Daily Returns

Gabelli Global Small  vs.  Calamos Convertible Opportunit

Gabelli Global Small

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Gabelli Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Calamos Convertible

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Gabelli Global and Calamos Convertible

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

The idea behind Gabelli Global Small and Calamos Convertible Opportunities 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.