Correlation Between Columbia Large and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Columbia Large and Guinness Atkinson 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 Large and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Large Cap and Guinness Atkinson Global, you can compare the effects of market volatilities on Columbia Large and Guinness Atkinson 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 Large with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Large and Guinness Atkinson.
Diversification Opportunities for Columbia Large and Guinness Atkinson
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Guinness is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Large Cap and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global and Columbia Large 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 Large Cap are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Columbia Large i.e., Columbia Large and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Columbia Large and Guinness Atkinson
Assuming the 90 days horizon Columbia Large is expected to generate 1.05 times less return on investment than Guinness Atkinson. But when comparing it to its historical volatility, Columbia Large Cap is 1.31 times less risky than Guinness Atkinson. It trades about 0.11 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,075 in Guinness Atkinson Global on August 30, 2024 and sell it today you would earn a total of 2,373 from holding Guinness Atkinson Global or generate 58.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Large Cap vs. Guinness Atkinson Global
Performance |
| Timeline |
| Columbia Large Cap |
| Guinness Atkinson Global |
Columbia Large and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Large and Guinness Atkinson
The main advantage of trading using opposite Columbia Large and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Large position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Columbia Large vs. Vanguard Total Stock | Columbia Large vs. Vanguard 500 Index | Columbia Large vs. Vanguard Total Stock | Columbia Large vs. Vanguard Total Stock |
| Guinness Atkinson vs. Guinness Atkinson Global | Guinness Atkinson vs. Siit Dynamic Asset | Guinness Atkinson vs. Simt Sp 500 | Guinness Atkinson vs. Columbia Large Cap |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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