Correlation Between Columbia and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Columbia and Multi Manager 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 and Multi Manager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Treasury Index and Multi Manager Directional Alternative, you can compare the effects of market volatilities on Columbia and Multi Manager 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 with a short position of Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia and Multi Manager.
Diversification Opportunities for Columbia and Multi Manager
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Multi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Treasury Index and Multi Manager Directional Alte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Direct and Columbia 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 Treasury Index are associated (or correlated) with Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Direct has no effect on the direction of Columbia i.e., Columbia and Multi Manager go up and down completely randomly.
Pair Corralation between Columbia and Multi Manager
Assuming the 90 days horizon Columbia Treasury Index is expected to generate 0.48 times more return on investment than Multi Manager. However, Columbia Treasury Index is 2.08 times less risky than Multi Manager. It trades about 0.24 of its potential returns per unit of risk. Multi Manager Directional Alternative is currently generating about 0.04 per unit of risk. If you would invest 982.00 in Columbia Treasury Index on November 28, 2024 and sell it today you would earn a total of 15.00 from holding Columbia Treasury Index or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Treasury Index vs. Multi Manager Directional Alte
Performance |
| Timeline |
| Columbia Treasury Index |
| Multi Manager Direct |
Columbia and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia and Multi Manager
The main advantage of trading using opposite Columbia and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Columbia vs. Pace Select Advisors | Columbia vs. T Rowe Price | Columbia vs. John Hancock Money | Columbia vs. Prudential Emerging Markets |
| Multi Manager vs. Columbia Global Technology | Multi Manager vs. Global Technology Portfolio | Multi Manager vs. Technology Ultrasector Profund | Multi Manager vs. Allianzgi Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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