Correlation Between Multi Manager and Columbia Acorn
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Columbia Acorn 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 Acorn 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 Acorn International, you can compare the effects of market volatilities on Multi Manager and Columbia Acorn 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 Acorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Columbia Acorn.
Diversification Opportunities for Multi Manager and Columbia Acorn
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Multi and Columbia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Directional Alte and Columbia Acorn International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Acorn Inter 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 Acorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Acorn Inter has no effect on the direction of Multi Manager i.e., Multi Manager and Columbia Acorn go up and down completely randomly.
Pair Corralation between Multi Manager and Columbia Acorn
Assuming the 90 days horizon Multi Manager Directional Alternative is expected to under-perform the Columbia Acorn. In addition to that, Multi Manager is 1.18 times more volatile than Columbia Acorn International. It trades about -0.04 of its total potential returns per unit of risk. Columbia Acorn International is currently generating about 0.1 per unit of volatility. If you would invest 2,713 in Columbia Acorn International on September 12, 2024 and sell it today you would earn a total of 42.00 from holding Columbia Acorn International or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Multi Manager Directional Alte vs. Columbia Acorn International
Performance |
| Timeline |
| Multi Manager Direct |
| Columbia Acorn Inter |
Multi Manager and Columbia Acorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Columbia Acorn
The main advantage of trading using opposite Multi Manager and Columbia Acorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Columbia Acorn 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 Acorn will offset losses from the drop in Columbia Acorn'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 Acorn vs. Prudential Government Income | Columbia Acorn vs. Us Government Securities | Columbia Acorn vs. Goldman Sachs Government | Columbia Acorn vs. Intermediate Government Bond |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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