Correlation Between Touchstone Mid and Calamos Convertible

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

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

Diversification Opportunities for Touchstone Mid and Calamos Convertible

0.92

Correlation Coefficient

Touchstone Mid  Calamos Convertible

Almost no diversification

The 3 months correlation between Touchstone and Calamos is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Mid Cap and Calamos Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Convertible and Touchstone Mid 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 Touchstone Mid Cap are associated (or correlated) with Calamos Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Convertible has no effect on the direction of Touchstone Mid i.e., Touchstone Mid and Calamos Convertible go up and down completely randomly.

Pair Corralation between Touchstone Mid and Calamos Convertible

Assuming the 90 days horizon Touchstone Mid Cap is expected to generate 1.89 times more return on investment than Calamos Convertible. However, Touchstone Mid is 1.89 times more volatile than Calamos Vertible Fund. It trades about 0.07 of its potential returns per unit of risk. Calamos Vertible Fund is currently generating about 0.07 per unit of risk. If you would invest  3,102  in Touchstone Mid Cap on October 11, 2024 and sell it today you would earn a total of  1,148  from holding Touchstone Mid Cap or generate 37.01% return on investment over 90 days.

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

Touchstone Mid Cap  vs.  Calamos Vertible Fund

Touchstone Mid Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Mid Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Touchstone Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calamos Convertible

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Vertible Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calamos Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Touchstone Mid and Calamos Convertible

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

The idea behind Touchstone Mid Cap and Calamos Vertible 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 Transaction History module to view history of all your transactions and understand their impact on performance.