Correlation Between Innealta Capital and Calamos Vertible

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

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

Diversification Opportunities for Innealta Capital and Calamos Vertible

0.79

Correlation Coefficient

Innealta Capital  Calamos Vertible

Poor diversification

The 3 months correlation between Innealta and Calamos is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Innealta Capital Sector and Calamos Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Vertible and Innealta Capital 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 Innealta Capital Sector 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 Innealta Capital i.e., Innealta Capital and Calamos Vertible go up and down completely randomly.

Pair Corralation between Innealta Capital and Calamos Vertible

Assuming the 90 days horizon Innealta Capital is expected to generate 2.51 times less return on investment than Calamos Vertible. In addition to that, Innealta Capital is 1.23 times more volatile than Calamos Vertible Fund. It trades about 0.09 of its total potential returns per unit of risk. Calamos Vertible Fund is currently generating about 0.27 per unit of volatility. If you would invest  2,078  in Calamos Vertible Fund on September 13, 2024 and sell it today you would earn a total of  180.00  from holding Calamos Vertible Fund or generate 8.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Innealta Capital Sector  vs.  Calamos Vertible Fund

Innealta Capital Sector

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innealta Capital Sector are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Innealta Capital 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

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Vertible Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calamos Vertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Innealta Capital and Calamos Vertible

The main advantage of trading using opposite Innealta Capital and Calamos Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innealta Capital 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 Innealta Capital Sector 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.