Correlation Between Columbia Floating and Ab Select
Can any of the company-specific risk be diversified away by investing in both Columbia Floating and Ab Select 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 Floating and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Floating Rate and Ab Select Longshort, you can compare the effects of market volatilities on Columbia Floating and Ab Select 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 Floating with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Floating and Ab Select.
Diversification Opportunities for Columbia Floating and Ab Select
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and ASCLX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Floating Rate and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort and Columbia Floating 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 Floating Rate are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Columbia Floating i.e., Columbia Floating and Ab Select go up and down completely randomly.
Pair Corralation between Columbia Floating and Ab Select
Assuming the 90 days horizon Columbia Floating is expected to generate 10.27 times less return on investment than Ab Select. But when comparing it to its historical volatility, Columbia Floating Rate is 17.19 times less risky than Ab Select. It trades about 0.61 of its potential returns per unit of risk. Ab Select Longshort is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,352 in Ab Select Longshort on September 4, 2024 and sell it today you would earn a total of 57.00 from holding Ab Select Longshort or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 80.95% |
| Values | Daily Returns |
Columbia Floating Rate vs. Ab Select Longshort
Performance |
| Timeline |
| Columbia Floating Rate |
| Ab Select Longshort |
Columbia Floating and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Floating and Ab Select
The main advantage of trading using opposite Columbia Floating and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Floating position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Columbia Floating vs. Ab Select Longshort | Columbia Floating vs. Goldman Sachs Short | Columbia Floating vs. Barings Active Short | Columbia Floating vs. Vanguard Institutional Short Term |
| Ab Select vs. Aig Government Money | Ab Select vs. Schwab Treasury Money | Ab Select vs. Rbc Funds Trust | Ab Select vs. Lord Abbett Emerging |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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