Correlation Between Champlain Small and Calamos Global

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

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

Diversification Opportunities for Champlain Small and Calamos Global

0.86

Correlation Coefficient

Champlain Small  Calamos Global

Very poor diversification

The 3 months correlation between Champlain and Calamos is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Calamos Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Global Growth and Champlain Small 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 Champlain Small are associated (or correlated) with Calamos Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Global Growth has no effect on the direction of Champlain Small i.e., Champlain Small and Calamos Global go up and down completely randomly.

Pair Corralation between Champlain Small and Calamos Global

Assuming the 90 days horizon Champlain Small is expected to under-perform the Calamos Global. In addition to that, Champlain Small is 1.19 times more volatile than Calamos Global Growth. It trades about -0.09 of its total potential returns per unit of risk. Calamos Global Growth is currently generating about -0.07 per unit of volatility. If you would invest  999.00  in Calamos Global Growth on December 31, 2024 and sell it today you would lose (41.00) from holding Calamos Global Growth or give up 4.1% of portfolio value over 90 days.

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

Champlain Small  vs.  Calamos Global Growth

Champlain Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Small 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 Global Growth

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Champlain Small and Calamos Global

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

The idea behind Champlain Small and Calamos Global Growth 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.