Correlation Between Small Cap and Calamos Dynamic

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

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

Diversification Opportunities for Small Cap and Calamos Dynamic

0.84

Correlation Coefficient

Small Cap  Calamos Dynamic

Very poor diversification

The 3 months correlation between Small and Calamos is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Core and Calamos Dynamic Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Dynamic Conv and Small Cap 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 Small Cap Core are associated (or correlated) with Calamos Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Dynamic Conv has no effect on the direction of Small Cap i.e., Small Cap and Calamos Dynamic go up and down completely randomly.

Pair Corralation between Small Cap and Calamos Dynamic

Assuming the 90 days horizon Small Cap Core is expected to generate 1.93 times more return on investment than Calamos Dynamic. However, Small Cap is 1.93 times more volatile than Calamos Dynamic Convertible. It trades about 0.1 of its potential returns per unit of risk. Calamos Dynamic Convertible is currently generating about 0.16 per unit of risk. If you would invest  1,202  in Small Cap Core on July 2, 2025 and sell it today you would earn a total of  80.00  from holding Small Cap Core or generate 6.66% return on investment over 90 days.

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

Small Cap Core  vs.  Calamos Dynamic Convertible

Small Cap Core

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Core are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Calamos Dynamic Conv

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Dynamic Convertible are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound fundamental indicators, Calamos Dynamic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Small Cap and Calamos Dynamic

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

The idea behind Small Cap Core and Calamos Dynamic Convertible 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.