Correlation Between Mairs Power and Columbia Balanced
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Columbia Balanced 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 Mairs Power and Columbia Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Balanced and Columbia Balanced Fund, you can compare the effects of market volatilities on Mairs Power and Columbia Balanced 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 Mairs Power with a short position of Columbia Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Columbia Balanced.
Diversification Opportunities for Mairs Power and Columbia Balanced
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mairs and Columbia is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Balanced and Columbia Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Balanced and Mairs Power 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 Mairs Power Balanced are associated (or correlated) with Columbia Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Balanced has no effect on the direction of Mairs Power i.e., Mairs Power and Columbia Balanced go up and down completely randomly.
Pair Corralation between Mairs Power and Columbia Balanced
Assuming the 90 days horizon Mairs Power is expected to generate 1.15 times less return on investment than Columbia Balanced. But when comparing it to its historical volatility, Mairs Power Balanced is 1.06 times less risky than Columbia Balanced. It trades about 0.11 of its potential returns per unit of risk. Columbia Balanced Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,376 in Columbia Balanced Fund on September 2, 2024 and sell it today you would earn a total of 1,172 from holding Columbia Balanced Fund or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Balanced vs. Columbia Balanced Fund
Performance |
| Timeline |
| Mairs Power Balanced |
| Columbia Balanced |
Mairs Power and Columbia Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Columbia Balanced
The main advantage of trading using opposite Mairs Power and Columbia Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Columbia Balanced 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 Balanced will offset losses from the drop in Columbia Balanced's long position.| Mairs Power vs. Mairs Power Growth | Mairs Power vs. Mairs Power Small | Mairs Power vs. Berwyn Income Fund | Mairs Power vs. Fpa Crescent Fund |
| Columbia Balanced vs. Columbia Trarian Core | Columbia Balanced vs. Columbia Dividend Income | Columbia Balanced vs. Columbia Strategic Income |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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