Correlation Between Columbia Real and American Funds
Can any of the company-specific risk be diversified away by investing in both Columbia Real and American Funds 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 American Funds 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 American Funds Multi Sector, you can compare the effects of market volatilities on Columbia Real and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and American Funds.
Diversification Opportunities for Columbia Real and American Funds
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COLUMBIA and American is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and American Funds Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Multi 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Multi has no effect on the direction of Columbia Real i.e., Columbia Real and American Funds go up and down completely randomly.
Pair Corralation between Columbia Real and American Funds
Assuming the 90 days horizon Columbia Real Estate is expected to generate 4.2 times more return on investment than American Funds. However, Columbia Real is 4.2 times more volatile than American Funds Multi Sector. It trades about 0.15 of its potential returns per unit of risk. American Funds Multi Sector is currently generating about 0.15 per unit of risk. If you would invest 1,106 in Columbia Real Estate on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Columbia Real Estate or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Columbia Real Estate vs. American Funds Multi Sector
Performance |
| Timeline |
| Columbia Real Estate |
| American Funds Multi |
Columbia Real and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and American Funds
The main advantage of trading using opposite Columbia Real and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Columbia Real vs. Realty Income | Columbia Real vs. Dynex Capital | Columbia Real vs. First Industrial Realty | Columbia Real vs. Healthcare Realty Trust |
| American Funds vs. Dunham Real Estate | American Funds vs. Columbia Real Estate | American Funds vs. Virtus Real Estate | American Funds vs. Guggenheim Risk Managed |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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