Correlation Between Columbia Multi and IShares Yield
Can any of the company-specific risk be diversified away by investing in both Columbia Multi and IShares Yield 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 Columbia Multi and IShares Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Multi Sector Municipal and iShares Yield Optimized, you can compare the effects of market volatilities on Columbia Multi and IShares Yield 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 Columbia Multi with a short position of IShares Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Multi and IShares Yield.
Diversification Opportunities for Columbia Multi and IShares Yield
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Multi Sector Municipa and iShares Yield Optimized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Yield Optimized and Columbia Multi 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 Columbia Multi Sector Municipal are associated (or correlated) with IShares Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Yield Optimized has no effect on the direction of Columbia Multi i.e., Columbia Multi and IShares Yield go up and down completely randomly.
Pair Corralation between Columbia Multi and IShares Yield
Given the investment horizon of 90 days Columbia Multi Sector Municipal is expected to generate 1.68 times more return on investment than IShares Yield. However, Columbia Multi is 1.68 times more volatile than iShares Yield Optimized. It trades about 0.19 of its potential returns per unit of risk. iShares Yield Optimized is currently generating about 0.16 per unit of risk. If you would invest 2,035 in Columbia Multi Sector Municipal on August 31, 2024 and sell it today you would earn a total of 41.00 from holding Columbia Multi Sector Municipal or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Columbia Multi Sector Municipa vs. iShares Yield Optimized
Performance |
| Timeline |
| Columbia Multi Sector |
| iShares Yield Optimized |
Columbia Multi and IShares Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Multi and IShares Yield
The main advantage of trading using opposite Columbia Multi and IShares Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Multi position performs unexpectedly, IShares Yield 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 IShares Yield will offset losses from the drop in IShares Yield's long position.| Columbia Multi vs. iShares JP Morgan | Columbia Multi vs. iShares iBoxx Investment | Columbia Multi vs. SPDR Nuveen Bloomberg | Columbia Multi vs. iShares MBS ETF |
| IShares Yield vs. iShares Interest Rate | IShares Yield vs. iShares Agency Bond | IShares Yield vs. iShares JP Morgan | IShares Yield vs. iShares Interest Rate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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