Correlation Between VanEck Intermediate and Columbia Multi
Can any of the company-specific risk be diversified away by investing in both VanEck Intermediate and Columbia Multi 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 VanEck Intermediate and Columbia Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Intermediate Muni and Columbia Multi Sector Municipal, you can compare the effects of market volatilities on VanEck Intermediate and Columbia Multi 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 VanEck Intermediate with a short position of Columbia Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and Columbia Multi.
Diversification Opportunities for VanEck Intermediate and Columbia Multi
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and Columbia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni and Columbia Multi Sector Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Multi Sector and VanEck Intermediate 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 VanEck Intermediate Muni are associated (or correlated) with Columbia Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Multi Sector has no effect on the direction of VanEck Intermediate i.e., VanEck Intermediate and Columbia Multi go up and down completely randomly.
Pair Corralation between VanEck Intermediate and Columbia Multi
Considering the 90-day investment horizon VanEck Intermediate Muni is expected to under-perform the Columbia Multi. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Intermediate Muni is 1.68 times less risky than Columbia Multi. The etf trades about -0.1 of its potential returns per unit of risk. The Columbia Multi Sector Municipal is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,037 in Columbia Multi Sector Municipal on November 3, 2024 and sell it today you would lose (5.00) from holding Columbia Multi Sector Municipal or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
VanEck Intermediate Muni vs. Columbia Multi Sector Municipa
Performance |
| Timeline |
| VanEck Intermediate Muni |
| Columbia Multi Sector |
VanEck Intermediate and Columbia Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Intermediate and Columbia Multi
The main advantage of trading using opposite VanEck Intermediate and Columbia Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Intermediate position performs unexpectedly, Columbia Multi 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 Multi will offset losses from the drop in Columbia Multi's long position.| VanEck Intermediate vs. VanEck Long Muni | VanEck Intermediate vs. VanEck Short Muni | VanEck Intermediate vs. SPDR Nuveen Bloomberg | VanEck Intermediate vs. Invesco National AMT Free |
| Columbia Multi vs. IQ MacKay Municipal | Columbia Multi vs. IQ MacKay Municipal | Columbia Multi vs. American Century Diversified | Columbia Multi vs. Hartford Municipal Opportunities |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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