Correlation Between Columbia Real and Lifex Inflation-protec
Can any of the company-specific risk be diversified away by investing in both Columbia Real and Lifex Inflation-protec 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 Lifex Inflation-protec 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 Lifex Inflation Protected Income, you can compare the effects of market volatilities on Columbia Real and Lifex Inflation-protec 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 Lifex Inflation-protec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and Lifex Inflation-protec.
Diversification Opportunities for Columbia Real and Lifex Inflation-protec
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Lifex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation-protec 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 Lifex Inflation-protec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation-protec has no effect on the direction of Columbia Real i.e., Columbia Real and Lifex Inflation-protec go up and down completely randomly.
Pair Corralation between Columbia Real and Lifex Inflation-protec
If you would invest 1,140 in Columbia Real Estate on August 26, 2024 and sell it today you would earn a total of 12.00 from holding Columbia Real Estate or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Real Estate vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| Columbia Real Estate |
| Lifex Inflation-protec |
Columbia Real and Lifex Inflation-protec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and Lifex Inflation-protec
The main advantage of trading using opposite Columbia Real and Lifex Inflation-protec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, Lifex Inflation-protec 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 Lifex Inflation-protec will offset losses from the drop in Lifex Inflation-protec'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 |
| Lifex Inflation-protec vs. Columbia Real Estate | Lifex Inflation-protec vs. Franklin Real Estate | Lifex Inflation-protec vs. Fidelity Real Estate | Lifex Inflation-protec vs. Simt Real Estate |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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