Correlation Between Calamos Opportunistic and Calamos Timpani

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

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

Diversification Opportunities for Calamos Opportunistic and Calamos Timpani

0.85

Correlation Coefficient

Calamos Opportunistic  Calamos Timpani

Very poor diversification

The 3 months correlation between Calamos and Calamos is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Opportunistic Value and Calamos Timpani Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Timpani Small and Calamos Opportunistic 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 Opportunistic Value are associated (or correlated) with Calamos Timpani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Timpani Small has no effect on the direction of Calamos Opportunistic i.e., Calamos Opportunistic and Calamos Timpani go up and down completely randomly.

Pair Corralation between Calamos Opportunistic and Calamos Timpani

Assuming the 90 days horizon Calamos Opportunistic Value is expected to generate 0.53 times more return on investment than Calamos Timpani. However, Calamos Opportunistic Value is 1.87 times less risky than Calamos Timpani. It trades about -0.09 of its potential returns per unit of risk. Calamos Timpani Small is currently generating about -0.1 per unit of risk. If you would invest  2,236  in Calamos Opportunistic Value on December 30, 2024 and sell it today you would lose (137.00) from holding Calamos Opportunistic Value or give up 6.13% of portfolio value over 90 days.

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

Calamos Opportunistic Value  vs.  Calamos Timpani Small

Calamos Opportunistic

Risk-Adjusted Performance

Very Weak

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

Calamos Timpani Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Timpani Small 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 basic 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 Opportunistic and Calamos Timpani

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

The idea behind Calamos Opportunistic Value and Calamos Timpani Small 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.