Correlation Between Amg Frontier and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Amg Frontier and Columbia Small 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 Amg Frontier and Columbia Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Frontier Small and Columbia Small Cap, you can compare the effects of market volatilities on Amg Frontier and Columbia Small 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 Amg Frontier with a short position of Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Frontier and Columbia Small.
Diversification Opportunities for Amg Frontier and Columbia Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Columbia is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Amg Frontier Small and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap and Amg Frontier 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 Amg Frontier Small are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Amg Frontier i.e., Amg Frontier and Columbia Small go up and down completely randomly.
Pair Corralation between Amg Frontier and Columbia Small
Assuming the 90 days horizon Amg Frontier is expected to generate 1.23 times less return on investment than Columbia Small. In addition to that, Amg Frontier is 1.1 times more volatile than Columbia Small Cap. It trades about 0.09 of its total potential returns per unit of risk. Columbia Small Cap is currently generating about 0.12 per unit of volatility. If you would invest 1,878 in Columbia Small Cap on August 25, 2024 and sell it today you would earn a total of 855.00 from holding Columbia Small Cap or generate 45.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Frontier Small vs. Columbia Small Cap
Performance |
| Timeline |
| Amg Frontier Small |
| Columbia Small Cap |
Amg Frontier and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Frontier and Columbia Small
The main advantage of trading using opposite Amg Frontier and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Frontier position performs unexpectedly, Columbia Small 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 Small will offset losses from the drop in Columbia Small's long position.| Amg Frontier vs. Columbia Small Cap | Amg Frontier vs. Baron Discovery Fund | Amg Frontier vs. Astoncrosswind Small Cap | Amg Frontier vs. Amg Frontier Small |
| Columbia Small vs. Columbia Global Technology | Columbia Small vs. Columbia Mid Cap | Columbia Small vs. Columbia Dividend Income | Columbia Small vs. Blackrock Mid Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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