Correlation Between Gmo High and Columbia Convertible
Can any of the company-specific risk be diversified away by investing in both Gmo High and Columbia Convertible 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 Gmo High and Columbia Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Columbia Convertible Securities, you can compare the effects of market volatilities on Gmo High and Columbia Convertible 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 Gmo High with a short position of Columbia Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Columbia Convertible.
Diversification Opportunities for Gmo High and Columbia Convertible
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Columbia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Columbia Convertible Securitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Convertible and Gmo High 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 Gmo High Yield are associated (or correlated) with Columbia Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Convertible has no effect on the direction of Gmo High i.e., Gmo High and Columbia Convertible go up and down completely randomly.
Pair Corralation between Gmo High and Columbia Convertible
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.44 times more return on investment than Columbia Convertible. However, Gmo High Yield is 2.28 times less risky than Columbia Convertible. It trades about 0.09 of its potential returns per unit of risk. Columbia Convertible Securities is currently generating about -0.02 per unit of risk. If you would invest 1,669 in Gmo High Yield on October 19, 2024 and sell it today you would earn a total of 7.00 from holding Gmo High Yield or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Columbia Convertible Securitie
Performance |
| Timeline |
| Gmo High Yield |
| Columbia Convertible |
Gmo High and Columbia Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Columbia Convertible
The main advantage of trading using opposite Gmo High and Columbia Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Columbia Convertible 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 Columbia Convertible will offset losses from the drop in Columbia Convertible's long position.| Gmo High vs. Eventide Healthcare Life | Gmo High vs. Prudential Health Sciences | Gmo High vs. Tekla Healthcare Investors | Gmo High vs. Vanguard Health Care |
| Columbia Convertible vs. Barings High Yield | Columbia Convertible vs. Rbc Ultra Short Fixed | Columbia Convertible vs. Gmo High Yield | Columbia Convertible vs. Dreyfusstandish Global Fixed |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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