Correlation Between Global Advantage and Columbia Seligman
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Global Advantage Portfolio vs. Columbia Seligman Global
Performance |
Timeline |
Global Advantage Por |
Columbia Seligman Global |
Global Advantage and Columbia Seligman Volatility Contrast
Predicted Return Density |
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.Global Advantage vs. Global Advantage Portfolio | ||
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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