Correlation Between Multi Manager and Columbia Flexible
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Columbia Flexible 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 Flexible 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 Flexible Capital, you can compare the effects of market volatilities on Multi Manager and Columbia Flexible 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 Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Columbia Flexible.
Diversification Opportunities for Multi Manager and Columbia Flexible
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Columbia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Directional Alte and Columbia Flexible Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Flexible Capital 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 Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Flexible Capital has no effect on the direction of Multi Manager i.e., Multi Manager and Columbia Flexible go up and down completely randomly.
Pair Corralation between Multi Manager and Columbia Flexible
Assuming the 90 days horizon Multi Manager Directional Alternative is expected to generate 1.04 times more return on investment than Columbia Flexible. However, Multi Manager is 1.04 times more volatile than Columbia Flexible Capital. It trades about 0.15 of its potential returns per unit of risk. Columbia Flexible Capital is currently generating about 0.12 per unit of risk. If you would invest 646.00 in Multi Manager Directional Alternative on September 12, 2024 and sell it today you would earn a total of 172.00 from holding Multi Manager Directional Alternative or generate 26.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.7% |
| Values | Daily Returns |
Multi Manager Directional Alte vs. Columbia Flexible Capital
Performance |
| Timeline |
| Multi Manager Direct |
| Columbia Flexible Capital |
Multi Manager and Columbia Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Columbia Flexible
The main advantage of trading using opposite Multi Manager and Columbia Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Columbia Flexible 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 Flexible will offset losses from the drop in Columbia Flexible's long position.| Multi Manager vs. Science Technology Fund | Multi Manager vs. Pgim Jennison Technology | Multi Manager vs. Invesco Technology Fund | Multi Manager vs. Allianzgi Technology Fund |
| Columbia Flexible vs. Scharf Global Opportunity | Columbia Flexible vs. Falcon Focus Scv | Columbia Flexible vs. Aam Select Income | Columbia Flexible vs. Arrow Managed Futures |
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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