Correlation Between Columbia Multi and SPDR Nuveen
Can any of the company-specific risk be diversified away by investing in both Columbia Multi and SPDR Nuveen 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 SPDR Nuveen 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 SPDR Nuveen Municipal, you can compare the effects of market volatilities on Columbia Multi and SPDR Nuveen 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 SPDR Nuveen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Multi and SPDR Nuveen.
Diversification Opportunities for Columbia Multi and SPDR Nuveen
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and SPDR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Multi Sector Municipa and SPDR Nuveen Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Municipal 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 SPDR Nuveen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Nuveen Municipal has no effect on the direction of Columbia Multi i.e., Columbia Multi and SPDR Nuveen go up and down completely randomly.
Pair Corralation between Columbia Multi and SPDR Nuveen
Given the investment horizon of 90 days Columbia Multi Sector Municipal is expected to generate 1.49 times more return on investment than SPDR Nuveen. However, Columbia Multi is 1.49 times more volatile than SPDR Nuveen Municipal. It trades about 0.21 of its potential returns per unit of risk. SPDR Nuveen Municipal is currently generating about 0.14 per unit of risk. If you would invest 2,033 in Columbia Multi Sector Municipal on August 28, 2024 and sell it today you would earn a total of 42.00 from holding Columbia Multi Sector Municipal or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Multi Sector Municipa vs. SPDR Nuveen Municipal
Performance |
| Timeline |
| Columbia Multi Sector |
| SPDR Nuveen Municipal |
Columbia Multi and SPDR Nuveen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Multi and SPDR Nuveen
The main advantage of trading using opposite Columbia Multi and SPDR Nuveen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Multi position performs unexpectedly, SPDR Nuveen 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 SPDR Nuveen will offset losses from the drop in SPDR Nuveen's long position.| Columbia Multi vs. SSGA Active Trust | Columbia Multi vs. SPDR MarketAxess Investment | Columbia Multi vs. SSGA Active Trust |
| SPDR Nuveen vs. SSGA Active Trust | SPDR Nuveen vs. SPDR MarketAxess Investment | SPDR Nuveen vs. SSGA Active Trust |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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