Correlation Between Gabelli Healthcare and Calamos Short

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

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

Diversification Opportunities for Gabelli Healthcare and Calamos Short

0.53

Correlation Coefficient

Gabelli Healthcare  Calamos Short

Very weak diversification

The 3 months correlation between Gabelli and Calamos is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Healthcare and Calamos Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Short Term and Gabelli Healthcare 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 The Gabelli Healthcare are associated (or correlated) with Calamos Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Short Term has no effect on the direction of Gabelli Healthcare i.e., Gabelli Healthcare and Calamos Short go up and down completely randomly.

Pair Corralation between Gabelli Healthcare and Calamos Short

Assuming the 90 days horizon The Gabelli Healthcare is expected to generate 6.25 times more return on investment than Calamos Short. However, Gabelli Healthcare is 6.25 times more volatile than Calamos Short Term Bond. It trades about 0.03 of its potential returns per unit of risk. Calamos Short Term Bond is currently generating about 0.15 per unit of risk. If you would invest  1,120  in The Gabelli Healthcare on September 13, 2024 and sell it today you would earn a total of  52.00  from holding The Gabelli Healthcare or generate 4.64% return on investment over 90 days.

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

The Gabelli Healthcare  vs.  Calamos Short Term Bond

The Gabelli Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Calamos Short Term

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gabelli Healthcare and Calamos Short

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

The idea behind The Gabelli Healthcare and Calamos Short Term Bond 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.