Correlation Between Columbia Real and Western Assets
Can any of the company-specific risk be diversified away by investing in both Columbia Real and Western Assets 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 Western Assets 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 Western Assets Emerging, you can compare the effects of market volatilities on Columbia Real and Western Assets 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 Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and Western Assets.
Diversification Opportunities for Columbia Real and Western Assets
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and Western is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets Emerging 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 Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Columbia Real i.e., Columbia Real and Western Assets go up and down completely randomly.
Pair Corralation between Columbia Real and Western Assets
Assuming the 90 days horizon Columbia Real Estate is expected to under-perform the Western Assets. In addition to that, Columbia Real is 2.77 times more volatile than Western Assets Emerging. It trades about -0.06 of its total potential returns per unit of risk. Western Assets Emerging is currently generating about 0.2 per unit of volatility. If you would invest 1,077 in Western Assets Emerging on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Western Assets Emerging or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Real Estate vs. Western Assets Emerging
Performance |
| Timeline |
| Columbia Real Estate |
| Western Assets Emerging |
Columbia Real and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and Western Assets
The main advantage of trading using opposite Columbia Real and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, Western Assets 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 Western Assets will offset losses from the drop in Western Assets' long position.| Columbia Real vs. Rbc Microcap Value | Columbia Real vs. T Rowe Price | Columbia Real vs. Falcon Focus Scv | Columbia Real vs. Iaadx |
| Western Assets vs. Ftfa Franklin Templeton Growth | Western Assets vs. Smallcap Growth Fund | Western Assets vs. T Rowe Price | Western Assets vs. Champlain Mid 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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