Correlation Between Columbia Real and Applied Finance
Can any of the company-specific risk be diversified away by investing in both Columbia Real and Applied Finance 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 Real and Applied Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Real Estate and Applied Finance Core, you can compare the effects of market volatilities on Columbia Real and Applied Finance 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 Real with a short position of Applied Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and Applied Finance.
Diversification Opportunities for Columbia Real and Applied Finance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between COLUMBIA and Applied is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and Applied Finance Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Finance Core and Columbia Real 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 Real Estate are associated (or correlated) with Applied Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Finance Core has no effect on the direction of Columbia Real i.e., Columbia Real and Applied Finance go up and down completely randomly.
Pair Corralation between Columbia Real and Applied Finance
Assuming the 90 days horizon Columbia Real Estate is expected to generate 0.99 times more return on investment than Applied Finance. However, Columbia Real Estate is 1.01 times less risky than Applied Finance. It trades about -0.13 of its potential returns per unit of risk. Applied Finance Core is currently generating about -0.15 per unit of risk. If you would invest 995.00 in Columbia Real Estate on January 14, 2025 and sell it today you would lose (68.00) from holding Columbia Real Estate or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Columbia Real Estate vs. Applied Finance Core
Performance |
| Timeline |
| Columbia Real Estate |
| Applied Finance Core |
Columbia Real and Applied Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and Applied Finance
The main advantage of trading using opposite Columbia Real and Applied Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, Applied Finance 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 Applied Finance will offset losses from the drop in Applied Finance's long position.| Columbia Real vs. Realty Income | Columbia Real vs. Dynex Capital | Columbia Real vs. First Industrial Realty | Columbia Real vs. Healthcare Realty Trust |
| Applied Finance vs. Applied Finance Explorer | Applied Finance vs. Applied Finance Select | Applied Finance vs. Needham Small Cap | Applied Finance vs. The Brown Capital |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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