Correlation Between Columbia Real and Western Asset
Can any of the company-specific risk be diversified away by investing in both Columbia Real and Western Asset 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 Asset 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 Asset Inflation, you can compare the effects of market volatilities on Columbia Real and Western Asset 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 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and Western Asset.
Diversification Opportunities for Columbia Real and Western Asset
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Columbia and Western is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Columbia Real i.e., Columbia Real and Western Asset go up and down completely randomly.
Pair Corralation between Columbia Real and Western Asset
Assuming the 90 days horizon Columbia Real Estate is expected to generate 2.78 times more return on investment than Western Asset. However, Columbia Real is 2.78 times more volatile than Western Asset Inflation. It trades about 0.05 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.03 per unit of risk. If you would invest 853.00 in Columbia Real Estate on September 12, 2024 and sell it today you would earn a total of 272.00 from holding Columbia Real Estate or generate 31.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Columbia Real Estate vs. Western Asset Inflation
Performance |
| Timeline |
| Columbia Real Estate |
| Western Asset Inflation |
Columbia Real and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Real and Western Asset
The main advantage of trading using opposite Columbia Real and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Real position performs unexpectedly, Western Asset 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 Asset will offset losses from the drop in Western Asset's long position.| Columbia Real vs. Barings Emerging Markets | Columbia Real vs. Vy Jpmorgan Emerging | Columbia Real vs. Origin Emerging Markets | Columbia Real vs. Mid Cap 15x Strategy |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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