Correlation Between Columbia and Aig Government
Can any of the company-specific risk be diversified away by investing in both Columbia and Aig Government 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 Columbia and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Government Mortgage and Aig Government Money, you can compare the effects of market volatilities on Columbia and Aig Government 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 Columbia with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia and Aig Government.
Diversification Opportunities for Columbia and Aig Government
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Aig is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Government Mortgage and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Columbia 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 Columbia Government Mortgage are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Columbia i.e., Columbia and Aig Government go up and down completely randomly.
Pair Corralation between Columbia and Aig Government
Assuming the 90 days horizon Columbia Government Mortgage is expected to generate 2.38 times more return on investment than Aig Government. However, Columbia is 2.38 times more volatile than Aig Government Money. It trades about 0.22 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.24 per unit of risk. If you would invest 1,737 in Columbia Government Mortgage on November 9, 2024 and sell it today you would earn a total of 34.00 from holding Columbia Government Mortgage or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Government Mortgage vs. Aig Government Money
Performance |
| Timeline |
| Columbia Government |
| Aig Government Money |
Columbia and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia and Aig Government
The main advantage of trading using opposite Columbia and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Columbia vs. Gmo High Yield | Columbia vs. Litman Gregory Masters | Columbia vs. Pace High Yield | Columbia vs. Intal High Relative |
| Aig Government vs. Elfun Government Money | Aig Government vs. Jpmorgan Government Bond | Aig Government vs. Dws Government Money | Aig Government vs. John Hancock Government |
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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