Correlation Between Columbia Multi and MCEF
Can any of the company-specific risk be diversified away by investing in both Columbia Multi and MCEF 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 MCEF 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 MCEF, you can compare the effects of market volatilities on Columbia Multi and MCEF 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 MCEF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Multi and MCEF.
Diversification Opportunities for Columbia Multi and MCEF
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbia and MCEF is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Multi Sector Municipa and MCEF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEF 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 MCEF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEF has no effect on the direction of Columbia Multi i.e., Columbia Multi and MCEF go up and down completely randomly.
Pair Corralation between Columbia Multi and MCEF
If you would invest 2,032 in Columbia Multi Sector Municipal on August 24, 2024 and sell it today you would earn a total of 31.00 from holding Columbia Multi Sector Municipal or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Columbia Multi Sector Municipa vs. MCEF
Performance |
| Timeline |
| Columbia Multi Sector |
| MCEF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Columbia Multi and MCEF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Multi and MCEF
The main advantage of trading using opposite Columbia Multi and MCEF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Multi position performs unexpectedly, MCEF 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 MCEF will offset losses from the drop in MCEF's long position.| Columbia Multi vs. IQ MacKay Municipal | Columbia Multi vs. Hartford Municipal Opportunities | Columbia Multi vs. American Century Diversified | Columbia Multi vs. Franklin Liberty Federal |
| MCEF vs. IQ MacKay Municipal | MCEF vs. Columbia Multi Sector Municipal | MCEF vs. Hartford Municipal Opportunities | MCEF vs. iShares Short Maturity |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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