Correlation Between AltShares Trust and Callaway Golf

Can any of the company-specific risk be diversified away by investing in both AltShares Trust and Callaway Golf 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 AltShares Trust and Callaway Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AltShares Trust and Callaway Golf, you can compare the effects of market volatilities on AltShares Trust and Callaway Golf 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 AltShares Trust with a short position of Callaway Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of AltShares Trust and Callaway Golf.

Diversification Opportunities for AltShares Trust and Callaway Golf

-0.39

Correlation Coefficient

AltShares Trust  Callaway Golf

Very good diversification

The 3 months correlation between AltShares and Callaway is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AltShares Trust and Callaway Golf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callaway Golf and AltShares Trust 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 AltShares Trust are associated (or correlated) with Callaway Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callaway Golf has no effect on the direction of AltShares Trust i.e., AltShares Trust and Callaway Golf go up and down completely randomly.

Pair Corralation between AltShares Trust and Callaway Golf

Considering the 90-day investment horizon AltShares Trust is expected to generate 0.05 times more return on investment than Callaway Golf. However, AltShares Trust is 18.86 times less risky than Callaway Golf. It trades about 0.07 of its potential returns per unit of risk. Callaway Golf is currently generating about -0.03 per unit of risk. If you would invest  2,790  in AltShares Trust on February 3, 2025 and sell it today you would earn a total of  26.00  from holding AltShares Trust or generate 0.93% return on investment over 90 days.

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

AltShares Trust   vs.  Callaway Golf

AltShares Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AltShares Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AltShares Trust is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Callaway Golf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Callaway Golf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AltShares Trust and Callaway Golf

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

The idea behind AltShares Trust and Callaway Golf 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 Anywhere module to track or share privately all of your investments from the convenience of any device.