Correlation Between Columbia Corporate and City National
Can any of the company-specific risk be diversified away by investing in both Columbia Corporate and City National 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 Corporate and City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Porate Income and City National Rochdale, you can compare the effects of market volatilities on Columbia Corporate and City National 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 Corporate with a short position of City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Corporate and City National.
Diversification Opportunities for Columbia Corporate and City National
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Columbia and City is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Porate Income and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale and Columbia Corporate 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 Porate Income are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Columbia Corporate i.e., Columbia Corporate and City National go up and down completely randomly.
Pair Corralation between Columbia Corporate and City National
Assuming the 90 days horizon Columbia Corporate is expected to generate 2.24 times less return on investment than City National. But when comparing it to its historical volatility, Columbia Porate Income is 2.35 times less risky than City National. It trades about 0.07 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,401 in City National Rochdale on September 4, 2024 and sell it today you would earn a total of 550.00 from holding City National Rochdale or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Porate Income vs. City National Rochdale
Performance |
| Timeline |
| Columbia Porate Income |
| City National Rochdale |
Columbia Corporate and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Corporate and City National
The main advantage of trading using opposite Columbia Corporate and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Corporate position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Columbia Corporate vs. Kinetics Market Opportunities | Columbia Corporate vs. Rbc Emerging Markets | Columbia Corporate vs. Locorr Market Trend | Columbia Corporate vs. Jpmorgan Emerging Markets |
| City National vs. City National Rochdale | City National vs. City National Rochdale | City National vs. City National Rochdale | City National vs. City National Rochdale |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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