Correlation Between Calamos Short-term and Maryland Tax

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

By analyzing existing cross correlation between Calamos Short Term Bond and Maryland Tax Free Bond, you can compare the effects of market volatilities on Calamos Short-term and Maryland Tax 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 Short-term with a short position of Maryland Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Short-term and Maryland Tax.

Diversification Opportunities for Calamos Short-term and Maryland Tax

0.41

Correlation Coefficient

Calamos Short-term  Maryland Tax

Very weak diversification

The 3 months correlation between Calamos and Maryland is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Short Term Bond and Maryland Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maryland Tax Free and Calamos Short-term 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 Short Term Bond are associated (or correlated) with Maryland Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maryland Tax Free has no effect on the direction of Calamos Short-term i.e., Calamos Short-term and Maryland Tax go up and down completely randomly.

Pair Corralation between Calamos Short-term and Maryland Tax

Assuming the 90 days horizon Calamos Short Term Bond is expected to generate 0.51 times more return on investment than Maryland Tax. However, Calamos Short Term Bond is 1.95 times less risky than Maryland Tax. It trades about 0.12 of its potential returns per unit of risk. Maryland Tax Free Bond is currently generating about -0.03 per unit of risk. If you would invest  946.00  in Calamos Short Term Bond on November 29, 2024 and sell it today you would earn a total of  9.00  from holding Calamos Short Term Bond or generate 0.95% return on investment over 90 days.

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

Calamos Short Term Bond  vs.  Maryland Tax Free Bond

Calamos Short Term

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Short Term Bond are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calamos Short-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Maryland Tax Free

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Calamos Short-term and Maryland Tax

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

The idea behind Calamos Short Term Bond and Maryland Tax Free Bond 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 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.