Correlation Between Calamos Dynamic and Simt Small

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

By analyzing existing cross correlation between Calamos Dynamic Convertible and Simt Small Cap, you can compare the effects of market volatilities on Calamos Dynamic and Simt Small 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 Calamos Dynamic with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Dynamic and Simt Small.

Diversification Opportunities for Calamos Dynamic and Simt Small

-0.38

Correlation Coefficient

Calamos Dynamic  Simt Small

Very good diversification

The 3 months correlation between Calamos and Simt is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Dynamic Convertible and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap and Calamos Dynamic 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 Calamos Dynamic Convertible are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Calamos Dynamic i.e., Calamos Dynamic and Simt Small go up and down completely randomly.

Pair Corralation between Calamos Dynamic and Simt Small

Considering the 90-day investment horizon Calamos Dynamic Convertible is expected to under-perform the Simt Small. But the fund apears to be less risky and, when comparing its historical volatility, Calamos Dynamic Convertible is 1.43 times less risky than Simt Small. The fund trades about -0.14 of its potential returns per unit of risk. The Simt Small Cap is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,568  in Simt Small Cap on December 2, 2024 and sell it today you would lose (130.00) from holding Simt Small Cap or give up 3.64% of portfolio value over 90 days.

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

Calamos Dynamic Convertible  vs.  Simt Small Cap

Calamos Dynamic Conv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Dynamic Convertible has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound fundamental indicators, Calamos Dynamic is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Simt Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simt Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Calamos Dynamic and Simt Small

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

The idea behind Calamos Dynamic Convertible and Simt Small Cap 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.