Correlation Between Barings Emerging and Columbia Global
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Columbia Global 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 Barings Emerging and Columbia Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Columbia Global Equity, you can compare the effects of market volatilities on Barings Emerging and Columbia Global 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 Barings Emerging with a short position of Columbia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Columbia Global.
Diversification Opportunities for Barings Emerging and Columbia Global
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Columbia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Columbia Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Equity and Barings Emerging 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 Barings Emerging Markets are associated (or correlated) with Columbia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Equity has no effect on the direction of Barings Emerging i.e., Barings Emerging and Columbia Global go up and down completely randomly.
Pair Corralation between Barings Emerging and Columbia Global
Assuming the 90 days horizon Barings Emerging is expected to generate 1.44 times less return on investment than Columbia Global. But when comparing it to its historical volatility, Barings Emerging Markets is 1.91 times less risky than Columbia Global. It trades about 0.06 of its potential returns per unit of risk. Columbia Global Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,081 in Columbia Global Equity on September 3, 2024 and sell it today you would earn a total of 188.00 from holding Columbia Global Equity or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Columbia Global Equity
Performance |
| Timeline |
| Barings Emerging Markets |
| Columbia Global Equity |
Barings Emerging and Columbia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Columbia Global
The main advantage of trading using opposite Barings Emerging and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Columbia Global 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 Global will offset losses from the drop in Columbia Global's long position.| Barings Emerging vs. Ab Small Cap | Barings Emerging vs. Ab Small Cap | Barings Emerging vs. Oklahoma College Savings | Barings Emerging vs. Champlain Small |
| Columbia Global vs. First American Funds | Columbia Global vs. Aig Government Money | Columbia Global vs. Schwab Treasury Money | Columbia Global vs. John Hancock Money |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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