Correlation Between Firsthand Alternative and Columbia Convertible
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Columbia 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 Firsthand Alternative and Columbia Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Columbia Vertible Securities, you can compare the effects of market volatilities on Firsthand Alternative and Columbia 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 Firsthand Alternative with a short position of Columbia Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Columbia Convertible.
Diversification Opportunities for Firsthand Alternative and Columbia Convertible
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Columbia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Columbia Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Convertible and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Columbia Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Convertible has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Columbia Convertible go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Columbia Convertible
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Columbia Convertible. In addition to that, Firsthand Alternative is 3.13 times more volatile than Columbia Vertible Securities. It trades about -0.01 of its total potential returns per unit of risk. Columbia Vertible Securities is currently generating about 0.08 per unit of volatility. If you would invest 1,870 in Columbia Vertible Securities on September 3, 2024 and sell it today you would earn a total of 464.00 from holding Columbia Vertible Securities or generate 24.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Columbia Vertible Securities
Performance |
| Timeline |
| Firsthand Alternative |
| Columbia Convertible |
Firsthand Alternative and Columbia Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Columbia Convertible
The main advantage of trading using opposite Firsthand Alternative and Columbia Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Columbia 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 Columbia Convertible will offset losses from the drop in Columbia Convertible's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Columbia Convertible vs. Calvert Global Energy | Columbia Convertible vs. Clearbridge Energy Mlp | Columbia Convertible vs. Jennison Natural Resources | Columbia Convertible vs. Firsthand Alternative Energy |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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