Correlation Between Barings Global and Columbia
Can any of the company-specific risk be diversified away by investing in both Barings Global and Columbia 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 Global and Columbia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Columbia Government Mortgage, you can compare the effects of market volatilities on Barings Global and Columbia 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 Global with a short position of Columbia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Columbia.
Diversification Opportunities for Barings Global and Columbia
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barings and Columbia is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Columbia Government Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Government and Barings Global 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 Global Floating are associated (or correlated) with Columbia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Government has no effect on the direction of Barings Global i.e., Barings Global and Columbia go up and down completely randomly.
Pair Corralation between Barings Global and Columbia
Assuming the 90 days horizon Barings Global is expected to generate 3.18 times less return on investment than Columbia. But when comparing it to its historical volatility, Barings Global Floating is 8.28 times less risky than Columbia. It trades about 0.31 of its potential returns per unit of risk. Columbia Government Mortgage is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,773 in Columbia Government Mortgage on September 3, 2024 and sell it today you would earn a total of 19.00 from holding Columbia Government Mortgage or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Columbia Government Mortgage
Performance |
| Timeline |
| Barings Global Floating |
| Columbia Government |
Barings Global and Columbia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Columbia
The main advantage of trading using opposite Barings Global and Columbia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Columbia 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 will offset losses from the drop in Columbia's long position.| Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Floating Rate Fund | Barings Global vs. Floating Rate Fund |
| Columbia vs. Ab Global Risk | Columbia vs. Metropolitan West High | Columbia vs. Vanguard Star Fund | Columbia vs. Calvert High 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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