Correlation Between Columbia Strategic and The Hartford
Can any of the company-specific risk be diversified away by investing in both Columbia Strategic and The Hartford 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 Strategic and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Strategic Income and The Hartford Emerging, you can compare the effects of market volatilities on Columbia Strategic and The Hartford 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 Strategic with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Strategic and The Hartford.
Diversification Opportunities for Columbia Strategic and The Hartford
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and THE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Strategic Income and The Hartford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Emerging and Columbia Strategic 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 Strategic Income are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Emerging has no effect on the direction of Columbia Strategic i.e., Columbia Strategic and The Hartford go up and down completely randomly.
Pair Corralation between Columbia Strategic and The Hartford
Assuming the 90 days horizon Columbia Strategic is expected to generate 1.14 times less return on investment than The Hartford. But when comparing it to its historical volatility, Columbia Strategic Income is 1.48 times less risky than The Hartford. It trades about 0.08 of its potential returns per unit of risk. The Hartford Emerging is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 381.00 in The Hartford Emerging on September 3, 2024 and sell it today you would earn a total of 51.00 from holding The Hartford Emerging or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Strategic Income vs. The Hartford Emerging
Performance |
| Timeline |
| Columbia Strategic Income |
| Hartford Emerging |
Columbia Strategic and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Strategic and The Hartford
The main advantage of trading using opposite Columbia Strategic and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Strategic position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Columbia Strategic vs. The Hartford Emerging | Columbia Strategic vs. Artisan Emerging Markets | Columbia Strategic vs. Calamos Market Neutral | Columbia Strategic vs. Kinetics Market Opportunities |
| The Hartford vs. HUMANA INC | The Hartford vs. Aquagold International | The Hartford vs. Barloworld Ltd ADR | The Hartford vs. Morningstar Unconstrained Allocation |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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