Correlation Between Columbia Strategic and Columbia Thermostat
Can any of the company-specific risk be diversified away by investing in both Columbia Strategic and Columbia Thermostat 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 Columbia Thermostat 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 Columbia Thermostat Fund, you can compare the effects of market volatilities on Columbia Strategic and Columbia Thermostat 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 Columbia Thermostat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Strategic and Columbia Thermostat.
Diversification Opportunities for Columbia Strategic and Columbia Thermostat
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Columbia is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Strategic Income and Columbia Thermostat Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Thermostat 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 Columbia Thermostat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Thermostat has no effect on the direction of Columbia Strategic i.e., Columbia Strategic and Columbia Thermostat go up and down completely randomly.
Pair Corralation between Columbia Strategic and Columbia Thermostat
Assuming the 90 days horizon Columbia Strategic is expected to generate 1.29 times less return on investment than Columbia Thermostat. But when comparing it to its historical volatility, Columbia Strategic Income is 1.37 times less risky than Columbia Thermostat. It trades about 0.1 of its potential returns per unit of risk. Columbia Thermostat Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,419 in Columbia Thermostat Fund on September 14, 2024 and sell it today you would earn a total of 287.00 from holding Columbia Thermostat Fund or generate 20.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Strategic Income vs. Columbia Thermostat Fund
Performance |
| Timeline |
| Columbia Strategic Income |
| Columbia Thermostat |
Columbia Strategic and Columbia Thermostat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Strategic and Columbia Thermostat
The main advantage of trading using opposite Columbia Strategic and Columbia Thermostat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Strategic position performs unexpectedly, Columbia Thermostat 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 Thermostat will offset losses from the drop in Columbia Thermostat's long position.| Columbia Strategic vs. Columbia Thermostat Fund | Columbia Strategic vs. Spectrum Low Volatility | Columbia Strategic vs. Semper Mbs Total | Columbia Strategic vs. Columbia Adaptive Risk |
| Columbia Thermostat vs. Columbia Flexible Capital | Columbia Thermostat vs. Columbia Strategic Income | Columbia Thermostat vs. Columbia Thermostat Fund | Columbia Thermostat vs. Columbia Balanced Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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