Correlation Between ANT and Columbia Pacific/asia
Can any of the company-specific risk be diversified away by investing in both ANT and Columbia Pacific/asia 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 ANT and Columbia Pacific/asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and Columbia Pacificasia Fund, you can compare the effects of market volatilities on ANT and Columbia Pacific/asia 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 ANT with a short position of Columbia Pacific/asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Columbia Pacific/asia.
Diversification Opportunities for ANT and Columbia Pacific/asia
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANT and Columbia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Columbia Pacificasia Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Pacific/asia and ANT 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 ANT are associated (or correlated) with Columbia Pacific/asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Pacific/asia has no effect on the direction of ANT i.e., ANT and Columbia Pacific/asia go up and down completely randomly.
Pair Corralation between ANT and Columbia Pacific/asia
Assuming the 90 days trading horizon ANT is expected to generate 156.35 times more return on investment than Columbia Pacific/asia. However, ANT is 156.35 times more volatile than Columbia Pacificasia Fund. It trades about 0.16 of its potential returns per unit of risk. Columbia Pacificasia Fund is currently generating about 0.01 per unit of risk. If you would invest 610.00 in ANT on November 2, 2024 and sell it today you would lose (463.00) from holding ANT or give up 75.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.2% |
| Values | Daily Returns |
ANT vs. Columbia Pacificasia Fund
Performance |
| Timeline |
| ANT |
| Columbia Pacific/asia |
ANT and Columbia Pacific/asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Columbia Pacific/asia
The main advantage of trading using opposite ANT and Columbia Pacific/asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Columbia Pacific/asia 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 Pacific/asia will offset losses from the drop in Columbia Pacific/asia's long position.The idea behind ANT and Columbia Pacificasia 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.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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