Correlation Between Columbia Small and American Beacon
Can any of the company-specific risk be diversified away by investing in both Columbia Small and American Beacon 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 American Beacon 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 American Beacon Twentyfour, you can compare the effects of market volatilities on Columbia Small and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Small and American Beacon.
Diversification Opportunities for Columbia Small and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Columbia and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Small Cap and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Twen has no effect on the direction of Columbia Small i.e., Columbia Small and American Beacon go up and down completely randomly.
Pair Corralation between Columbia Small and American Beacon
If you would invest 839.00 in American Beacon Twentyfour on November 29, 2024 and sell it today you would earn a total of 6.00 from holding American Beacon Twentyfour or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Columbia Small Cap vs. American Beacon Twentyfour
Performance |
| Timeline |
| Columbia Small Cap |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| American Beacon Twen |
Columbia Small and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Small and American Beacon
The main advantage of trading using opposite Columbia Small and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Small position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Columbia Small vs. Goldman Sachs Small | Columbia Small vs. Glg Intl Small | Columbia Small vs. Touchstone Small Cap | Columbia Small vs. Ab Small Cap |
| American Beacon vs. Oklahoma College Savings | American Beacon vs. Baird Quality Intermediate | American Beacon vs. The Hartford World | American Beacon vs. Buffalo High Yield |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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