Correlation Between Small Cap and Calamos Market
Can any of the company-specific risk be diversified away by investing in both Small Cap and Calamos Market 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 Small Cap and Calamos Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Calamos Market Neutral, you can compare the effects of market volatilities on Small Cap and Calamos Market 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 Small Cap with a short position of Calamos Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Calamos Market.
Diversification Opportunities for Small Cap and Calamos Market
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Small and Calamos is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral and Small Cap 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 Small Cap Stock are associated (or correlated) with Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Small Cap i.e., Small Cap and Calamos Market go up and down completely randomly.
Pair Corralation between Small Cap and Calamos Market
Assuming the 90 days horizon Small Cap Stock is expected to generate 9.81 times more return on investment than Calamos Market. However, Small Cap is 9.81 times more volatile than Calamos Market Neutral. It trades about 0.06 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.23 per unit of risk. If you would invest 1,219 in Small Cap Stock on August 31, 2024 and sell it today you would earn a total of 306.00 from holding Small Cap Stock or generate 25.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Calamos Market Neutral
Performance |
| Timeline |
| Small Cap Stock |
| Calamos Market Neutral |
Small Cap and Calamos Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Calamos Market
The main advantage of trading using opposite Small Cap and Calamos Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Calamos Market 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 Market will offset losses from the drop in Calamos Market's long position.The idea behind Small Cap Stock and Calamos Market Neutral 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.| Calamos Market vs. Auer Growth Fund | Calamos Market vs. Qs Growth Fund | Calamos Market vs. Small Cap Stock | Calamos Market vs. Semiconductor Ultrasector Profund |
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.
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