Correlation Between IShares IBoxx and Columbia Multi
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx 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 IShares IBoxx and Columbia Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx Investment and Columbia Multi Sector Municipal, you can compare the effects of market volatilities on IShares IBoxx 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 IShares IBoxx with a short position of Columbia Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and Columbia Multi.
Diversification Opportunities for IShares IBoxx and Columbia Multi
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Columbia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment 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 IShares IBoxx 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 iShares iBoxx Investment 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 IShares IBoxx i.e., IShares IBoxx and Columbia Multi go up and down completely randomly.
Pair Corralation between IShares IBoxx and Columbia Multi
Considering the 90-day investment horizon iShares iBoxx Investment is expected to generate 1.62 times more return on investment than Columbia Multi. However, IShares IBoxx is 1.62 times more volatile than Columbia Multi Sector Municipal. It trades about 0.04 of its potential returns per unit of risk. Columbia Multi Sector Municipal is currently generating about 0.04 per unit of risk. If you would invest 10,083 in iShares iBoxx Investment on August 31, 2024 and sell it today you would earn a total of 904.00 from holding iShares iBoxx Investment or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBoxx Investment vs. Columbia Multi Sector Municipa
Performance |
| Timeline |
| iShares iBoxx Investment |
| Columbia Multi Sector |
IShares IBoxx and Columbia Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and Columbia Multi
The main advantage of trading using opposite IShares IBoxx and Columbia Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx 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.| IShares IBoxx vs. iShares iBoxx High | IShares IBoxx vs. iShares 1 3 Year | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 7 10 Year |
| Columbia Multi vs. iShares JP Morgan | Columbia Multi vs. iShares iBoxx Investment | Columbia Multi vs. SPDR Nuveen Bloomberg | Columbia Multi vs. iShares MBS ETF |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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