Correlation Between Calamos Growth and Touchstone Mid

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

Diversification Opportunities for Calamos Growth and Touchstone Mid

0.8

Correlation Coefficient

Calamos Growth  Touchstone Mid

Very poor diversification

The 3 months correlation between Calamos and Touchstone is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Calamos Growth Fund and Touchstone Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Mid Cap 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 Touchstone Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Mid Cap has no effect on the direction of Calamos Growth i.e., Calamos Growth and Touchstone Mid go up and down completely randomly.

Pair Corralation between Calamos Growth and Touchstone Mid

Assuming the 90 days horizon Calamos Growth is expected to generate 1.22 times less return on investment than Touchstone Mid. In addition to that, Calamos Growth is 1.39 times more volatile than Touchstone Mid Cap. It trades about 0.04 of its total potential returns per unit of risk. Touchstone Mid Cap is currently generating about 0.07 per unit of volatility. If you would invest  3,612  in Touchstone Mid Cap on September 25, 2024 and sell it today you would earn a total of  673.00  from holding Touchstone Mid Cap or generate 18.63% return on investment over 90 days.

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

Calamos Growth Fund  vs.  Touchstone Mid Cap

Calamos Growth

Risk-Adjusted Performance

0 of 100

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.

Touchstone Mid Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Mid Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Touchstone Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Calamos Growth and Touchstone Mid

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

The idea behind Calamos Growth Fund and Touchstone Mid Cap 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.