Correlation Between Multi Manager and Columbia Balanced
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Columbia Balanced 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 Multi Manager and Columbia Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager Directional Alternative and Columbia Balanced Fund, you can compare the effects of market volatilities on Multi Manager and Columbia Balanced 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 Multi Manager with a short position of Columbia Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Columbia Balanced.
Diversification Opportunities for Multi Manager and Columbia Balanced
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi and Columbia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Directional Alte and Columbia Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Balanced and Multi Manager 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 Multi Manager Directional Alternative are associated (or correlated) with Columbia Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Balanced has no effect on the direction of Multi Manager i.e., Multi Manager and Columbia Balanced go up and down completely randomly.
Pair Corralation between Multi Manager and Columbia Balanced
Assuming the 90 days horizon Multi Manager is expected to generate 1.38 times less return on investment than Columbia Balanced. But when comparing it to its historical volatility, Multi Manager Directional Alternative is 1.29 times less risky than Columbia Balanced. It trades about 0.1 of its potential returns per unit of risk. Columbia Balanced Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,894 in Columbia Balanced Fund on September 14, 2024 and sell it today you would earn a total of 1,387 from holding Columbia Balanced Fund or generate 35.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager Directional Alte vs. Columbia Balanced Fund
Performance |
| Timeline |
| Multi Manager Direct |
| Columbia Balanced |
Multi Manager and Columbia Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Columbia Balanced
The main advantage of trading using opposite Multi Manager and Columbia Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Columbia Balanced 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 Balanced will offset losses from the drop in Columbia Balanced's long position.| Multi Manager vs. John Hancock Ii | Multi Manager vs. Queens Road Small | Multi Manager vs. Royce Opportunity Fund | Multi Manager vs. Ab Small Cap |
| Columbia Balanced vs. Columbia Porate Income | Columbia Balanced vs. Columbia Ultra Short | Columbia Balanced vs. Columbia Treasury Index | Columbia Balanced vs. Multi Manager Directional Alternative |
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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