Correlation Between Columbia Emerging and Columbia Commodity
Can any of the company-specific risk be diversified away by investing in both Columbia Emerging and Columbia Commodity 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 Commodity 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 Modity Strategy, you can compare the effects of market volatilities on Columbia Emerging and Columbia Commodity 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 Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Emerging and Columbia Commodity.
Diversification Opportunities for Columbia Emerging and Columbia Commodity
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Columbia is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Emerging Markets and Columbia Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Modity Strategy 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 Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Modity Strategy has no effect on the direction of Columbia Emerging i.e., Columbia Emerging and Columbia Commodity go up and down completely randomly.
Pair Corralation between Columbia Emerging and Columbia Commodity
Assuming the 90 days horizon Columbia Emerging Markets is expected to under-perform the Columbia Commodity. In addition to that, Columbia Emerging is 1.18 times more volatile than Columbia Modity Strategy. It trades about -0.18 of its total potential returns per unit of risk. Columbia Modity Strategy is currently generating about -0.08 per unit of volatility. If you would invest 1,015 in Columbia Modity Strategy on September 4, 2024 and sell it today you would lose (14.00) from holding Columbia Modity Strategy or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Columbia Emerging Markets vs. Columbia Modity Strategy
Performance |
| Timeline |
| Columbia Emerging Markets |
| Columbia Modity Strategy |
Columbia Emerging and Columbia Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Emerging and Columbia Commodity
The main advantage of trading using opposite Columbia Emerging and Columbia Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Emerging position performs unexpectedly, Columbia Commodity 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 Commodity will offset losses from the drop in Columbia Commodity's long position.| Columbia Emerging vs. Columbia Porate Income | Columbia Emerging vs. Columbia Ultra Short | Columbia Emerging vs. Columbia Ultra Short | Columbia Emerging vs. Columbia Treasury Index |
| Columbia Commodity vs. Champlain Mid Cap | Columbia Commodity vs. Qs Moderate Growth | Columbia Commodity vs. Mid Cap Growth | Columbia Commodity vs. Pace Smallmedium Growth |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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