Correlation Between Columbia Small and Ladenburg Growth
Can any of the company-specific risk be diversified away by investing in both Columbia Small and Ladenburg Growth 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 Small and Ladenburg Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Small Cap and Ladenburg Growth, you can compare the effects of market volatilities on Columbia Small and Ladenburg Growth 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 Small with a short position of Ladenburg Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Small and Ladenburg Growth.
Diversification Opportunities for Columbia Small and Ladenburg Growth
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Ladenburg is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Small Cap and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth and Columbia Small 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 Small Cap are associated (or correlated) with Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Columbia Small i.e., Columbia Small and Ladenburg Growth go up and down completely randomly.
Pair Corralation between Columbia Small and Ladenburg Growth
Assuming the 90 days horizon Columbia Small is expected to generate 1.15 times less return on investment than Ladenburg Growth. In addition to that, Columbia Small is 2.01 times more volatile than Ladenburg Growth. It trades about 0.07 of its total potential returns per unit of risk. Ladenburg Growth is currently generating about 0.16 per unit of volatility. If you would invest 1,684 in Ladenburg Growth on September 2, 2024 and sell it today you would earn a total of 232.00 from holding Ladenburg Growth or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Columbia Small Cap vs. Ladenburg Growth
Performance |
| Timeline |
| Columbia Small Cap |
| Ladenburg Growth |
Columbia Small and Ladenburg Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Small and Ladenburg Growth
The main advantage of trading using opposite Columbia Small and Ladenburg Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Small position performs unexpectedly, Ladenburg Growth 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 Ladenburg Growth will offset losses from the drop in Ladenburg Growth's long position.| Columbia Small vs. Mesirow Financial Small | Columbia Small vs. Financials Ultrasector Profund | Columbia Small vs. 1919 Financial Services | Columbia Small vs. Vanguard Financials Index |
| Ladenburg Growth vs. Western Asset Diversified | Ladenburg Growth vs. Aqr Diversified Arbitrage | Ladenburg Growth vs. Huber Capital Diversified | Ladenburg Growth vs. American Funds Conservative |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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