Correlation Between Calamos Growth and Baird Smallcap

Can any of the company-specific risk be diversified away by investing in both Calamos Growth and Baird Smallcap 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 Baird Smallcap 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 Baird Smallcap Value, you can compare the effects of market volatilities on Calamos Growth and Baird Smallcap 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 Baird Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calamos Growth and Baird Smallcap.

Diversification Opportunities for Calamos Growth and Baird Smallcap

0.88

Correlation Coefficient

Calamos Growth  Baird Smallcap

Very poor diversification

The 3 months correlation between Calamos and Baird is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Growth Fund and Baird Smallcap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallcap Value 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 Baird Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallcap Value has no effect on the direction of Calamos Growth i.e., Calamos Growth and Baird Smallcap go up and down completely randomly.

Pair Corralation between Calamos Growth and Baird Smallcap

Assuming the 90 days horizon Calamos Growth Fund is expected to under-perform the Baird Smallcap. In addition to that, Calamos Growth is 1.06 times more volatile than Baird Smallcap Value. It trades about -0.12 of its total potential returns per unit of risk. Baird Smallcap Value is currently generating about -0.1 per unit of volatility. If you would invest  1,643  in Baird Smallcap Value on December 21, 2024 and sell it today you would lose (131.00) from holding Baird Smallcap Value or give up 7.97% of portfolio value over 90 days.

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

Calamos Growth Fund  vs.  Baird Smallcap Value

Calamos Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calamos Growth Fund 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.

Baird Smallcap Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baird Smallcap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Calamos Growth and Baird Smallcap

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

The idea behind Calamos Growth Fund and Baird Smallcap Value 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.