Correlation Between Bbh Limited and Calamos Hedged

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

By analyzing existing cross correlation between Bbh Limited Duration and Calamos Hedged Equity, you can compare the effects of market volatilities on Bbh Limited and Calamos Hedged 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 Bbh Limited with a short position of Calamos Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Limited and Calamos Hedged.

Diversification Opportunities for Bbh Limited and Calamos Hedged

0.33

Correlation Coefficient

Bbh Limited  Calamos Hedged

Weak diversification

The 3 months correlation between Bbh and Calamos is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Limited Duration and Calamos Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Hedged Equity and Bbh Limited 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 Bbh Limited Duration are associated (or correlated) with Calamos Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Hedged Equity has no effect on the direction of Bbh Limited i.e., Bbh Limited and Calamos Hedged go up and down completely randomly.

Pair Corralation between Bbh Limited and Calamos Hedged

Assuming the 90 days horizon Bbh Limited is expected to generate 2.27 times less return on investment than Calamos Hedged. But when comparing it to its historical volatility, Bbh Limited Duration is 4.06 times less risky than Calamos Hedged. It trades about 0.24 of its potential returns per unit of risk. Calamos Hedged Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,308  in Calamos Hedged Equity on December 1, 2024 and sell it today you would earn a total of  440.00  from holding Calamos Hedged Equity or generate 33.64% return on investment over 90 days.

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

Bbh Limited Duration  vs.  Calamos Hedged Equity

Bbh Limited Duration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bbh Limited Duration are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Bbh Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calamos Hedged Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bbh Limited and Calamos Hedged

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

The idea behind Bbh Limited Duration and Calamos Hedged Equity 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.