Correlation Between Amg Gwk and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Amg Gwk and Columbia Emerging 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 Amg Gwk and Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Gwk Municipal and Columbia Emerging Markets, you can compare the effects of market volatilities on Amg Gwk and Columbia Emerging 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 Amg Gwk with a short position of Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Gwk and Columbia Emerging.
Diversification Opportunities for Amg Gwk and Columbia Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amg and Columbia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Municipal and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets and Amg Gwk 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 Amg Gwk Municipal are associated (or correlated) with Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Amg Gwk i.e., Amg Gwk and Columbia Emerging go up and down completely randomly.
Pair Corralation between Amg Gwk and Columbia Emerging
Assuming the 90 days horizon Amg Gwk is expected to generate 2.84 times less return on investment than Columbia Emerging. But when comparing it to its historical volatility, Amg Gwk Municipal is 1.64 times less risky than Columbia Emerging. It trades about 0.05 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 818.00 in Columbia Emerging Markets on August 27, 2024 and sell it today you would earn a total of 134.00 from holding Columbia Emerging Markets or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Gwk Municipal vs. Columbia Emerging Markets
Performance |
| Timeline |
| Amg Gwk Municipal |
| Columbia Emerging Markets |
Amg Gwk and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Gwk and Columbia Emerging
The main advantage of trading using opposite Amg Gwk and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk position performs unexpectedly, Columbia Emerging 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 Emerging will offset losses from the drop in Columbia Emerging's long position.| Amg Gwk vs. Amg Managers Doubleline | Amg Gwk vs. Amg Gwk Municipal | Amg Gwk vs. Intermediate Term Tax Free Bond | Amg Gwk vs. Blkrc Sgy Mnp |
| Columbia Emerging vs. Columbia Ultra Short | Columbia Emerging vs. Columbia Integrated Large | Columbia Emerging vs. Columbia Integrated Large | Columbia Emerging 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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