Correlation Between Gmo High and Columbia Mid
Can any of the company-specific risk be diversified away by investing in both Gmo High and Columbia Mid 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 Mid 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 Mid Cap, you can compare the effects of market volatilities on Gmo High and Columbia Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Columbia Mid.
Diversification Opportunities for Gmo High and Columbia Mid
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gmo and Columbia is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Columbia Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Mid Cap has no effect on the direction of Gmo High i.e., Gmo High and Columbia Mid go up and down completely randomly.
Pair Corralation between Gmo High and Columbia Mid
Assuming the 90 days horizon Gmo High is expected to generate 1.86 times less return on investment than Columbia Mid. But when comparing it to its historical volatility, Gmo High Yield is 4.09 times less risky than Columbia Mid. It trades about 0.13 of its potential returns per unit of risk. Columbia Mid Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,732 in Columbia Mid Cap on September 20, 2024 and sell it today you would earn a total of 629.00 from holding Columbia Mid Cap or generate 36.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.48% |
| Values | Daily Returns |
Gmo High Yield vs. Columbia Mid Cap
Performance |
| Timeline |
| Gmo High Yield |
| Columbia Mid Cap |
Gmo High and Columbia Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Columbia Mid
The main advantage of trading using opposite Gmo High and Columbia Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Columbia Mid 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 Mid will offset losses from the drop in Columbia Mid's long position.| Gmo High vs. Siit High Yield | Gmo High vs. Western Asset High | Gmo High vs. Nuveen Municipal High | Gmo High vs. California High Yield Municipal |
| Columbia Mid vs. Columbia Ultra Short | Columbia Mid vs. Columbia Integrated Large | Columbia Mid vs. Columbia Integrated Large | Columbia Mid vs. Columbia Integrated Large |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |