Correlation Between Lifex Inflation-protec and Columbia Real
Can any of the company-specific risk be diversified away by investing in both Lifex Inflation-protec and Columbia Real 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 Lifex Inflation-protec and Columbia Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifex Inflation Protected Income and Columbia Real Estate, you can compare the effects of market volatilities on Lifex Inflation-protec and Columbia Real 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 Lifex Inflation-protec with a short position of Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifex Inflation-protec and Columbia Real.
Diversification Opportunities for Lifex Inflation-protec and Columbia Real
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifex and Columbia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lifex Inflation Protected Inco and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate and Lifex Inflation-protec 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 Lifex Inflation Protected Income are associated (or correlated) with Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Lifex Inflation-protec i.e., Lifex Inflation-protec and Columbia Real go up and down completely randomly.
Pair Corralation between Lifex Inflation-protec and Columbia Real
If you would invest 1,140 in Columbia Real Estate on August 26, 2024 and sell it today you would earn a total of 12.00 from holding Columbia Real Estate or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifex Inflation Protected Inco vs. Columbia Real Estate
Performance |
| Timeline |
| Lifex Inflation-protec |
| Columbia Real Estate |
Lifex Inflation-protec and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifex Inflation-protec and Columbia Real
The main advantage of trading using opposite Lifex Inflation-protec and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifex Inflation-protec position performs unexpectedly, Columbia Real 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 Real will offset losses from the drop in Columbia Real's long position.| Lifex Inflation-protec vs. Columbia Real Estate | Lifex Inflation-protec vs. Franklin Real Estate | Lifex Inflation-protec vs. Fidelity Real Estate | Lifex Inflation-protec vs. Simt Real Estate |
| Columbia Real vs. Realty Income | Columbia Real vs. Dynex Capital | Columbia Real vs. First Industrial Realty | Columbia Real vs. Healthcare Realty Trust |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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