Correlation Between Federated Ohio and Calamos Growth

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

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

Diversification Opportunities for Federated Ohio and Calamos Growth

-0.01

Correlation Coefficient

Federated Ohio  Calamos Growth

Good diversification

The 3 months correlation between Federated and Calamos is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Calamos Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Growth and Federated Ohio 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 Federated Ohio Municipal are associated (or correlated) with Calamos Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Growth has no effect on the direction of Federated Ohio i.e., Federated Ohio and Calamos Growth go up and down completely randomly.

Pair Corralation between Federated Ohio and Calamos Growth

Assuming the 90 days horizon Federated Ohio Municipal is expected to generate 0.16 times more return on investment than Calamos Growth. However, Federated Ohio Municipal is 6.38 times less risky than Calamos Growth. It trades about -0.05 of its potential returns per unit of risk. Calamos Growth Fund is currently generating about -0.12 per unit of risk. If you would invest  1,026  in Federated Ohio Municipal on December 30, 2024 and sell it today you would lose (7.00) from holding Federated Ohio Municipal or give up 0.68% of portfolio value over 90 days.

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

Federated Ohio Municipal  vs.  Calamos Growth Fund

Federated Ohio Municipal

Risk-Adjusted Performance

Very Weak

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

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 fundamental 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 Federated Ohio and Calamos Growth

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

The idea behind Federated Ohio Municipal and Calamos 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.