Correlation Between Auer Growth and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Columbia Small 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 Auer Growth and Columbia Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Columbia Small Cap, you can compare the effects of market volatilities on Auer Growth and Columbia Small 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 Auer Growth with a short position of Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Columbia Small.
Diversification Opportunities for Auer Growth and Columbia Small
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Auer and Columbia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Auer Growth i.e., Auer Growth and Columbia Small go up and down completely randomly.
Pair Corralation between Auer Growth and Columbia Small
Assuming the 90 days horizon Auer Growth Fund is expected to generate 1.38 times more return on investment than Columbia Small. However, Auer Growth is 1.38 times more volatile than Columbia Small Cap. It trades about 0.05 of its potential returns per unit of risk. Columbia Small Cap is currently generating about 0.02 per unit of risk. If you would invest 1,373 in Auer Growth Fund on September 3, 2024 and sell it today you would earn a total of 395.00 from holding Auer Growth Fund or generate 28.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Columbia Small Cap
Performance |
| Timeline |
| Auer Growth Fund |
| Columbia Small Cap |
Auer Growth and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Columbia Small
The main advantage of trading using opposite Auer Growth and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Columbia Small 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 Small will offset losses from the drop in Columbia Small's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Columbia Small vs. Ms Global Fixed | Columbia Small vs. Ultra Short Fixed Income | Columbia Small vs. Dreyfusstandish Global Fixed | Columbia Small vs. Touchstone Premium Yield |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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