Correlation Between Calamos Growth and Europacific Growth

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

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

Diversification Opportunities for Calamos Growth and Europacific Growth

-0.21

Correlation Coefficient

Calamos Growth  Europacific Growth

Very good diversification

The 3 months correlation between Calamos and Europacific is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Growth Fund and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Calamos Growth 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 Growth Fund are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Calamos Growth i.e., Calamos Growth and Europacific Growth go up and down completely randomly.

Pair Corralation between Calamos Growth and Europacific Growth

Assuming the 90 days horizon Calamos Growth Fund is expected to generate 1.25 times more return on investment than Europacific Growth. However, Calamos Growth is 1.25 times more volatile than Europacific Growth Fund. It trades about 0.2 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about -0.02 per unit of risk. If you would invest  1,501  in Calamos Growth Fund on September 1, 2024 and sell it today you would earn a total of  190.00  from holding Calamos Growth Fund or generate 12.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Calamos Growth Fund  vs.  Europacific Growth Fund

Calamos Growth

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Growth Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Calamos Growth may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Europacific Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europacific Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Europacific Growth 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 Growth and Europacific Growth

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

The idea behind Calamos Growth Fund and Europacific Growth Fund 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.