Correlation Between Multisector Bond and Columbia Balanced
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Columbia Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Columbia Balanced Fund, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Columbia Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Columbia Balanced.
Diversification Opportunities for Multisector Bond and Columbia Balanced
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Multisector and Columbia is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Columbia Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Balanced and Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and Columbia Balanced go up and down completely randomly.
Pair Corralation between Multisector Bond and Columbia Balanced
Assuming the 90 days horizon Multisector Bond is expected to generate 1.4 times less return on investment than Columbia Balanced. But when comparing it to its historical volatility, Multisector Bond Sma is 1.26 times less risky than Columbia Balanced. It trades about 0.15 of its potential returns per unit of risk. Columbia Balanced Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,387 in Columbia Balanced Fund on September 1, 2024 and sell it today you would earn a total of 1,127 from holding Columbia Balanced Fund or generate 25.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Multisector Bond Sma vs. Columbia Balanced Fund
Performance |
| Timeline |
| Multisector Bond Sma |
| Columbia Balanced |
Multisector Bond and Columbia Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Columbia Balanced
The main advantage of trading using opposite Multisector Bond and Columbia Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. Siit High Yield | Multisector Bond vs. Msift High Yield | Multisector Bond vs. Valic Company I | Multisector Bond vs. Pace High Yield |
| Columbia Balanced vs. Federated Ohio Municipal | Columbia Balanced vs. Pace Municipal Fixed | Columbia Balanced vs. Morningstar Municipal Bond | Columbia Balanced vs. Alliancebernstein National Municipal |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |