Correlation Between Columbia Emerging and Columbia Limited
Can any of the company-specific risk be diversified away by investing in both Columbia Emerging and Columbia Limited 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 Columbia Emerging and Columbia Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Emerging Markets and Columbia Limited Duration, you can compare the effects of market volatilities on Columbia Emerging and Columbia Limited 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 Columbia Emerging with a short position of Columbia Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Emerging and Columbia Limited.
Diversification Opportunities for Columbia Emerging and Columbia Limited
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Columbia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Emerging Markets and Columbia Limited Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Limited Duration and Columbia 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 Columbia Emerging Markets are associated (or correlated) with Columbia Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Limited Duration has no effect on the direction of Columbia Emerging i.e., Columbia Emerging and Columbia Limited go up and down completely randomly.
Pair Corralation between Columbia Emerging and Columbia Limited
Assuming the 90 days horizon Columbia Emerging Markets is expected to generate 2.77 times more return on investment than Columbia Limited. However, Columbia Emerging is 2.77 times more volatile than Columbia Limited Duration. It trades about 0.03 of its potential returns per unit of risk. Columbia Limited Duration is currently generating about -0.04 per unit of risk. If you would invest 957.00 in Columbia Emerging Markets on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Columbia Emerging Markets or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Emerging Markets vs. Columbia Limited Duration
Performance |
| Timeline |
| Columbia Emerging Markets |
| Columbia Limited Duration |
Columbia Emerging and Columbia Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Emerging and Columbia Limited
The main advantage of trading using opposite Columbia Emerging and Columbia Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Emerging position performs unexpectedly, Columbia Limited 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 Limited will offset losses from the drop in Columbia Limited's long position.| Columbia Emerging vs. Angel Oak Financial | Columbia Emerging vs. Financials Ultrasector Profund | Columbia Emerging vs. Goldman Sachs Financial | Columbia Emerging vs. Vanguard Financials Index |
| Columbia Limited vs. Artisan Emerging Markets | Columbia Limited vs. T Rowe Price | Columbia Limited vs. Vanguard Global Credit | Columbia Limited vs. Mirova Global Green |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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