Correlation Between Columbia Convertible and Lifex Income
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Lifex Income 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 Convertible and Lifex Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Vertible Securities and Lifex Income, you can compare the effects of market volatilities on Columbia Convertible and Lifex Income 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 Convertible with a short position of Lifex Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Lifex Income.
Diversification Opportunities for Columbia Convertible and Lifex Income
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Lifex is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Vertible Securities and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income and Columbia Convertible 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 Vertible Securities are associated (or correlated) with Lifex Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Income has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Lifex Income go up and down completely randomly.
Pair Corralation between Columbia Convertible and Lifex Income
Assuming the 90 days horizon Columbia Vertible Securities is expected to generate 1.11 times more return on investment than Lifex Income. However, Columbia Convertible is 1.11 times more volatile than Lifex Income. It trades about 0.08 of its potential returns per unit of risk. Lifex Income is currently generating about 0.05 per unit of risk. If you would invest 1,870 in Columbia Vertible Securities on September 3, 2024 and sell it today you would earn a total of 464.00 from holding Columbia Vertible Securities or generate 24.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.45% |
| Values | Daily Returns |
Columbia Vertible Securities vs. Lifex Income
Performance |
| Timeline |
| Columbia Convertible |
| Lifex Income |
Columbia Convertible and Lifex Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Lifex Income
The main advantage of trading using opposite Columbia Convertible and Lifex Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Lifex Income 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 Income will offset losses from the drop in Lifex Income's long position.| Columbia Convertible vs. Calvert Global Energy | Columbia Convertible vs. Clearbridge Energy Mlp | Columbia Convertible vs. Jennison Natural Resources | Columbia Convertible vs. Firsthand Alternative Energy |
| Lifex Income vs. Neuberger Berman High | Lifex Income vs. Aquagold International | Lifex Income vs. Morningstar Unconstrained Allocation | Lifex Income vs. High Yield Municipal Fund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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