Correlation Between Columbia Real and Great-west Real
Can any of the company-specific risk be diversified away by investing in both Columbia Real and Great-west Real 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 Great-west Real 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 Great West Real Estate, you can compare the effects of market volatilities on Columbia Real and Great-west Real 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 Great-west Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and Great-west Real.
Diversification Opportunities for Columbia Real and Great-west Real
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Great-west is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and Great West Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Real 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 Great-west Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Real has no effect on the direction of Columbia Real i.e., Columbia Real and Great-west Real go up and down completely randomly.
Pair Corralation between Columbia Real and Great-west Real
Assuming the 90 days horizon Columbia Real Estate is expected to generate 0.93 times more return on investment than Great-west Real. However, Columbia Real Estate is 1.08 times less risky than Great-west Real. It trades about 0.11 of its potential returns per unit of risk. Great West Real Estate is currently generating about 0.01 per unit of risk. If you would invest 1,145 in Columbia Real Estate on August 29, 2024 and sell it today you would earn a total of 26.00 from holding Columbia Real Estate or generate 2.27% 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. Great West Real Estate
Performance |
| Timeline |
| Columbia Real Estate |
| Great West Real |
Columbia Real and Great-west Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and Great-west Real
The main advantage of trading using opposite Columbia Real and Great-west Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, Great-west Real 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 Great-west Real will offset losses from the drop in Great-west Real's long position.| Columbia Real vs. Chartwell Short Duration | Columbia Real vs. Barings Active Short | Columbia Real vs. Rationalpier 88 Convertible | Columbia Real vs. Artisan Emerging Markets |
| Great-west Real vs. Commonwealth Global Fund | Great-west Real vs. Scharf Global Opportunity | Great-west Real vs. Rbb Fund Trust | Great-west Real vs. Barings Global Floating |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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