Correlation Between Columbia Real and State Street
Can any of the company-specific risk be diversified away by investing in both Columbia Real and State Street 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 State Street 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 State Street Equity, you can compare the effects of market volatilities on Columbia Real and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and State Street.
Diversification Opportunities for Columbia Real and State Street
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and State is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and State Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Equity 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Equity has no effect on the direction of Columbia Real i.e., Columbia Real and State Street go up and down completely randomly.
Pair Corralation between Columbia Real and State Street
Assuming the 90 days horizon Columbia Real is expected to generate 1.67 times less return on investment than State Street. In addition to that, Columbia Real is 1.4 times more volatile than State Street Equity. It trades about 0.05 of its total potential returns per unit of risk. State Street Equity is currently generating about 0.12 per unit of volatility. If you would invest 35,610 in State Street Equity on September 3, 2024 and sell it today you would earn a total of 19,860 from holding State Street Equity or generate 55.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Real Estate vs. State Street Equity
Performance |
| Timeline |
| Columbia Real Estate |
| State Street Equity |
Columbia Real and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and State Street
The main advantage of trading using opposite Columbia Real and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Columbia Real vs. Vanguard Institutional Short Term | Columbia Real vs. Sterling Capital Short | Columbia Real vs. Touchstone Ultra Short | Columbia Real vs. Federated Short Term Income |
| State Street vs. Simt Real Estate | State Street vs. Vanguard Reit Index | State Street vs. Columbia Real Estate | State Street vs. Amg Managers Centersquare |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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