Correlation Between Columbia Convertible and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Federated Kaufmann 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 Convertible and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Vertible Securities and Federated Kaufmann Large, you can compare the effects of market volatilities on Columbia Convertible and Federated Kaufmann 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 Convertible with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Federated Kaufmann.
Diversification Opportunities for Columbia Convertible and Federated Kaufmann
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Federated is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Vertible Securities and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large and Columbia Convertible 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 Vertible Securities are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Columbia Convertible and Federated Kaufmann
Assuming the 90 days horizon Columbia Vertible Securities is expected to generate 0.35 times more return on investment than Federated Kaufmann. However, Columbia Vertible Securities is 2.83 times less risky than Federated Kaufmann. It trades about 0.08 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.03 per unit of risk. If you would invest 1,847 in Columbia Vertible Securities on September 3, 2024 and sell it today you would earn a total of 457.00 from holding Columbia Vertible Securities or generate 24.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Vertible Securities vs. Federated Kaufmann Large
Performance |
| Timeline |
| Columbia Convertible |
| Federated Kaufmann Large |
Columbia Convertible and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Federated Kaufmann
The main advantage of trading using opposite Columbia Convertible and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Columbia Convertible vs. John Hancock Money | Columbia Convertible vs. Wt Mutual Fund | Columbia Convertible vs. General Money Market | Columbia Convertible vs. Elfun Government Money |
| Federated Kaufmann vs. American Funds The | Federated Kaufmann vs. American Funds The | Federated Kaufmann vs. Growth Fund Of | Federated Kaufmann vs. Growth Fund Of |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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