Correlation Between Quantitative Longshort and Columbia Social
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort and Columbia Social 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 Quantitative Longshort and Columbia Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Columbia Social Bond, you can compare the effects of market volatilities on Quantitative Longshort and Columbia Social 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 Quantitative Longshort with a short position of Columbia Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Columbia Social.
Diversification Opportunities for Quantitative Longshort and Columbia Social
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quantitative and Columbia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Columbia Social Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Social Bond and Quantitative Longshort 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 Quantitative Longshort Equity are associated (or correlated) with Columbia Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Social Bond has no effect on the direction of Quantitative Longshort i.e., Quantitative Longshort and Columbia Social go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Columbia Social
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 1.82 times more return on investment than Columbia Social. However, Quantitative Longshort is 1.82 times more volatile than Columbia Social Bond. It trades about 0.1 of its potential returns per unit of risk. Columbia Social Bond is currently generating about 0.03 per unit of risk. If you would invest 1,229 in Quantitative Longshort Equity on September 12, 2024 and sell it today you would earn a total of 247.00 from holding Quantitative Longshort Equity or generate 20.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.55% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Columbia Social Bond
Performance |
| Timeline |
| Quantitative Longshort |
| Columbia Social Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Quantitative Longshort and Columbia Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Columbia Social
The main advantage of trading using opposite Quantitative Longshort and Columbia Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort position performs unexpectedly, Columbia Social 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 Social will offset losses from the drop in Columbia Social's long position.| Quantitative Longshort vs. Neuberger Berman Long | Quantitative Longshort vs. Neuberger Berman Long | Quantitative Longshort vs. Neuberger Berman Long | Quantitative Longshort vs. Aqr Long Short Equity |
| Columbia Social vs. Aqr Long Short Equity | Columbia Social vs. Alpine Ultra Short | Columbia Social vs. Franklin Federal Limited Term | Columbia Social vs. Quantitative Longshort Equity |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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