Correlation Between Columbia Contrarian and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Columbia Contrarian 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 Columbia Contrarian and Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Trarian Core and Columbia Emerging Markets, you can compare the effects of market volatilities on Columbia Contrarian 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 Columbia Contrarian with a short position of Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Contrarian and Columbia Emerging.
Diversification Opportunities for Columbia Contrarian and Columbia Emerging
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Columbia is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Trarian Core 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 Columbia Contrarian 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 Columbia Trarian Core 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 Columbia Contrarian i.e., Columbia Contrarian and Columbia Emerging go up and down completely randomly.
Pair Corralation between Columbia Contrarian and Columbia Emerging
Assuming the 90 days horizon Columbia Trarian Core is expected to generate 0.9 times more return on investment than Columbia Emerging. However, Columbia Trarian Core is 1.12 times less risky than Columbia Emerging. It trades about 0.11 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 2,517 in Columbia Trarian Core on September 4, 2024 and sell it today you would earn a total of 1,400 from holding Columbia Trarian Core or generate 55.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Columbia Trarian Core vs. Columbia Emerging Markets
Performance |
| Timeline |
| Columbia Trarian Core |
| Columbia Emerging Markets |
Columbia Contrarian and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Contrarian and Columbia Emerging
The main advantage of trading using opposite Columbia Contrarian and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Contrarian 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.| Columbia Contrarian vs. Guggenheim Risk Managed | Columbia Contrarian vs. Commonwealth Real Estate | Columbia Contrarian vs. Columbia Real Estate | Columbia Contrarian vs. Jhancock Real Estate |
| Columbia Emerging vs. Columbia Large Cap | Columbia Emerging vs. Columbia Trarian Core | Columbia Emerging vs. Columbia Dividend Opportunity | Columbia Emerging vs. Columbia Seligman Global |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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