Correlation Between Columbia Capital and American Funds
Can any of the company-specific risk be diversified away by investing in both Columbia Capital and American Funds 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 Capital and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Capital Allocation and American Funds American, you can compare the effects of market volatilities on Columbia Capital and American Funds 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 Capital with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Capital and American Funds.
Diversification Opportunities for Columbia Capital and American Funds
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Capital Allocation and American Funds American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds American and Columbia Capital 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 Capital Allocation are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds American has no effect on the direction of Columbia Capital i.e., Columbia Capital and American Funds go up and down completely randomly.
Pair Corralation between Columbia Capital and American Funds
Assuming the 90 days horizon Columbia Capital Allocation is expected to generate 1.08 times more return on investment than American Funds. However, Columbia Capital is 1.08 times more volatile than American Funds American. It trades about 0.1 of its potential returns per unit of risk. American Funds American is currently generating about 0.1 per unit of risk. If you would invest 944.00 in Columbia Capital Allocation on September 4, 2024 and sell it today you would earn a total of 298.00 from holding Columbia Capital Allocation or generate 31.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Columbia Capital Allocation vs. American Funds American
Performance |
| Timeline |
| Columbia Capital All |
| American Funds American |
Columbia Capital and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Capital and American Funds
The main advantage of trading using opposite Columbia Capital and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Capital position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Columbia Capital vs. Columbia Trarian Core | Columbia Capital vs. Columbia Dividend Income | Columbia Capital vs. Columbia Disciplined E | Columbia Capital vs. Columbia Dividend Opportunity |
| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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