Correlation Between Columbia Contrarian and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Columbia Contrarian and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Columbia Contrarian and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Contrarian and Dow Jones.
Diversification Opportunities for Columbia Contrarian and Dow Jones
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between COLUMBIA and Dow is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Trarian Core and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Columbia Contrarian i.e., Columbia Contrarian and Dow Jones go up and down completely randomly.
Pair Corralation between Columbia Contrarian and Dow Jones
Assuming the 90 days horizon Columbia Trarian Core is expected to generate 1.17 times more return on investment than Dow Jones. However, Columbia Contrarian is 1.17 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 2,139 in Columbia Trarian Core on September 4, 2024 and sell it today you would earn a total of 1,125 from holding Columbia Trarian Core or generate 52.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Trarian Core vs. Dow Jones Industrial
Performance |
| Timeline |
Columbia Contrarian and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Columbia Trarian Core
Pair trading matchups for Columbia Contrarian
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Columbia Contrarian and Dow Jones
The main advantage of trading using opposite Columbia Contrarian and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Contrarian position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Columbia Contrarian vs. Columbia Dividend Income | Columbia Contrarian vs. Columbia Balanced Fund | Columbia Contrarian vs. Columbia Global Technology | Columbia Contrarian vs. Columbia Trarian Core |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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