Correlation Between Columbia Multi and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Columbia Multi and SSGA Active 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 SSGA Active 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 SSGA Active Trust, you can compare the effects of market volatilities on Columbia Multi and SSGA Active 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 SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Multi and SSGA Active.
Diversification Opportunities for Columbia Multi and SSGA Active
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and SSGA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Multi Sector Municipa and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust 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 SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of Columbia Multi i.e., Columbia Multi and SSGA Active go up and down completely randomly.
Pair Corralation between Columbia Multi and SSGA Active
Given the investment horizon of 90 days Columbia Multi Sector Municipal is expected to generate 2.09 times more return on investment than SSGA Active. However, Columbia Multi is 2.09 times more volatile than SSGA Active Trust. It trades about 0.15 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.04 per unit of risk. 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Multi Sector Municipa vs. SSGA Active Trust
Performance |
| Timeline |
| Columbia Multi Sector |
| SSGA Active Trust |
Columbia Multi and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Multi and SSGA Active
The main advantage of trading using opposite Columbia Multi and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Multi position performs unexpectedly, SSGA Active 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 SSGA Active will offset losses from the drop in SSGA Active's long position.| Columbia Multi vs. BlackRock Intermediate Muni | Columbia Multi vs. SSGA Active Trust | Columbia Multi vs. SPDR MarketAxess Investment | Columbia Multi vs. SSGA Active Trust |
| SSGA Active vs. SPDR Bloomberg Barclays | SSGA Active vs. SPDR SSGA Fixed | SSGA Active vs. SPDR DoubleLine Short | SSGA Active vs. SPDR Portfolio Corporate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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