Correlation Between Barclays ETN and Columbia India
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Columbia India 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 Barclays ETN and Columbia India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and Columbia India Consumer, you can compare the effects of market volatilities on Barclays ETN and Columbia India 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 Barclays ETN with a short position of Columbia India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Columbia India.
Diversification Opportunities for Barclays ETN and Columbia India
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and Columbia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Columbia India Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia India Consumer and Barclays ETN 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 Barclays ETN Select are associated (or correlated) with Columbia India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia India Consumer has no effect on the direction of Barclays ETN i.e., Barclays ETN and Columbia India go up and down completely randomly.
Pair Corralation between Barclays ETN and Columbia India
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.38 times more return on investment than Columbia India. However, Barclays ETN is 1.38 times more volatile than Columbia India Consumer. It trades about 0.65 of its potential returns per unit of risk. Columbia India Consumer is currently generating about -0.04 per unit of risk. If you would invest 2,638 in Barclays ETN Select on September 4, 2024 and sell it today you would earn a total of 390.00 from holding Barclays ETN Select or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Barclays ETN Select vs. Columbia India Consumer
Performance |
| Timeline |
| Barclays ETN Select |
| Columbia India Consumer |
Barclays ETN and Columbia India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Columbia India
The main advantage of trading using opposite Barclays ETN and Columbia India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Columbia India 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 India will offset losses from the drop in Columbia India's long position.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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