Correlation Between Barclays ETN and Columbia ETF
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Columbia ETF 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 ETF 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 ETF Trust, you can compare the effects of market volatilities on Barclays ETN and Columbia ETF 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 ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Columbia ETF.
Diversification Opportunities for Barclays ETN and Columbia ETF
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barclays and Columbia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Columbia ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia ETF Trust 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 ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia ETF Trust has no effect on the direction of Barclays ETN i.e., Barclays ETN and Columbia ETF go up and down completely randomly.
Pair Corralation between Barclays ETN and Columbia ETF
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.28 times more return on investment than Columbia ETF. However, Barclays ETN is 1.28 times more volatile than Columbia ETF Trust. It trades about 0.17 of its potential returns per unit of risk. Columbia ETF Trust is currently generating about 0.11 per unit of risk. If you would invest 2,035 in Barclays ETN Select on November 3, 2024 and sell it today you would earn a total of 984.00 from holding Barclays ETN Select or generate 48.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. Columbia ETF Trust
Performance |
| Timeline |
| Barclays ETN Select |
| Columbia ETF Trust |
Barclays ETN and Columbia ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Columbia ETF
The main advantage of trading using opposite Barclays ETN and Columbia ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Columbia ETF 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 ETF will offset losses from the drop in Columbia ETF'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 |
| Columbia ETF vs. Columbia Research Enhanced | Columbia ETF vs. RiverFront Dynamic Flex Cap | Columbia ETF vs. PIMCO RAFI ESG | Columbia ETF vs. DBX ETF Trust |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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