Correlation Between Amg River and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Amg River and Columbia Seligman 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 Amg River and Columbia Seligman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and Columbia Seligman Global, you can compare the effects of market volatilities on Amg River and Columbia Seligman 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 Amg River with a short position of Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Columbia Seligman.
Diversification Opportunities for Amg River and Columbia Seligman
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amg and Columbia is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Columbia Seligman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Global and Amg River 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 Amg River Road are associated (or correlated) with Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Global has no effect on the direction of Amg River i.e., Amg River and Columbia Seligman go up and down completely randomly.
Pair Corralation between Amg River and Columbia Seligman
Assuming the 90 days horizon Amg River Road is expected to generate 0.21 times more return on investment than Columbia Seligman. However, Amg River Road is 4.68 times less risky than Columbia Seligman. It trades about 0.04 of its potential returns per unit of risk. Columbia Seligman Global is currently generating about -0.1 per unit of risk. If you would invest 1,090 in Amg River Road on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Amg River Road or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. Columbia Seligman Global
Performance |
| Timeline |
| Amg River Road |
| Columbia Seligman Global |
Amg River and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Columbia Seligman
The main advantage of trading using opposite Amg River and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, Columbia Seligman 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 Seligman will offset losses from the drop in Columbia Seligman's long position.| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
| Columbia Seligman vs. Columbia Seligman Munications | Columbia Seligman vs. Columbia Seligman Global | Columbia Seligman vs. Columbia Seligman Global | Columbia Seligman vs. Columbia Seligman Global |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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