Correlation Between Columbia Convertible and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Pear Tree 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 Pear Tree 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 Pear Tree Polaris, you can compare the effects of market volatilities on Columbia Convertible and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Pear Tree.
Diversification Opportunities for Columbia Convertible and Pear Tree
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbia and Pear is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Vertible Securities and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Pear Tree go up and down completely randomly.
Pair Corralation between Columbia Convertible and Pear Tree
Assuming the 90 days horizon Columbia Vertible Securities is expected to generate 0.69 times more return on investment than Pear Tree. However, Columbia Vertible Securities is 1.45 times less risky than Pear Tree. It trades about 0.18 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about -0.02 per unit of risk. If you would invest 2,081 in Columbia Vertible Securities on September 3, 2024 and sell it today you would earn a total of 249.00 from holding Columbia Vertible Securities or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Vertible Securities vs. Pear Tree Polaris
Performance |
| Timeline |
| Columbia Convertible |
| Pear Tree Polaris |
Columbia Convertible and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Pear Tree
The main advantage of trading using opposite Columbia Convertible and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree'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 |
| Pear Tree vs. Federated Short Term Income | Pear Tree vs. Rbc Short Duration | Pear Tree vs. Aqr Long Short Equity | Pear Tree vs. Calvert Short Duration |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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