Correlation Between Barings Emerging and Calamos Growth

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Can any of the company-specific risk be diversified away by investing in both Barings Emerging 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 Barings Emerging and Calamos Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Calamos Growth Fund, you can compare the effects of market volatilities on Barings Emerging 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 Barings Emerging with a short position of Calamos Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Calamos Growth.

Diversification Opportunities for Barings Emerging and Calamos Growth

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Barings and Calamos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Calamos Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Growth and Barings Emerging 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 Barings Emerging Markets 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 Barings Emerging i.e., Barings Emerging and Calamos Growth go up and down completely randomly.

Pair Corralation between Barings Emerging and Calamos Growth

Assuming the 90 days horizon Barings Emerging is expected to generate 4.94 times less return on investment than Calamos Growth. But when comparing it to its historical volatility, Barings Emerging Markets is 2.74 times less risky than Calamos Growth. It trades about 0.07 of its potential returns per unit of risk. Calamos Growth Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,692  in Calamos Growth Fund on September 14, 2024 and sell it today you would earn a total of  2,216  from holding Calamos Growth Fund or generate 82.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Barings Emerging Markets  vs.  Calamos Growth Fund

 Performance 
       Timeline  
Barings Emerging Markets 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Barings Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Barings Emerging 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

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Growth Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calamos Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Barings Emerging and Calamos Growth Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barings Emerging and Calamos Growth

The main advantage of trading using opposite Barings Emerging and Calamos Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging 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 Barings Emerging Markets 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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