Correlation Between Global Advantage and Columbia Seligman

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Can any of the company-specific risk be diversified away by investing in both Global Advantage and Columbia Seligman 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 Global Advantage and Columbia Seligman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Advantage Portfolio and Columbia Seligman Global, you can compare the effects of market volatilities on Global Advantage and Columbia Seligman 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 Global Advantage with a short position of Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Advantage and Columbia Seligman.

Diversification Opportunities for Global Advantage and Columbia Seligman

GlobalColumbiaDiversified AwayGlobalColumbiaDiversified Away100%
-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Global and Columbia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Advantage Portfolio and Columbia Seligman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Global and Global Advantage 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 Global Advantage Portfolio are associated (or correlated) with Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Global has no effect on the direction of Global Advantage i.e., Global Advantage and Columbia Seligman go up and down completely randomly.

Pair Corralation between Global Advantage and Columbia Seligman

Assuming the 90 days horizon Global Advantage Portfolio is expected to generate 1.06 times more return on investment than Columbia Seligman. However, Global Advantage is 1.06 times more volatile than Columbia Seligman Global. It trades about 0.12 of its potential returns per unit of risk. Columbia Seligman Global is currently generating about 0.03 per unit of risk. If you would invest  891.00  in Global Advantage Portfolio on November 26, 2024 and sell it today you would earn a total of  613.00  from holding Global Advantage Portfolio or generate 68.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Global Advantage Portfolio  vs.  Columbia Seligman Global

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505101520
JavaScript chart by amCharts 3.21.15MSPTX SGTRX
       Timeline  
Global Advantage Por 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Global Advantage Portfolio are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Advantage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1414.51515.51616.5
Columbia Seligman Global 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Columbia Seligman Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb68707274767880

Global Advantage and Columbia Seligman Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.74-4.3-2.86-1.420.01.53.034.566.09 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15MSPTX SGTRX
       Returns  

Pair Trading with Global Advantage and Columbia Seligman

The main advantage of trading using opposite Global Advantage and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Advantage position performs unexpectedly, Columbia Seligman 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 Seligman will offset losses from the drop in Columbia Seligman's long position.
The idea behind Global Advantage Portfolio and Columbia Seligman Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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