Correlation Between Columbia Convertible and Live Oak
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Live Oak 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 Convertible and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Convertible Securities and Live Oak Health, you can compare the effects of market volatilities on Columbia Convertible and Live Oak 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 Convertible with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Live Oak.
Diversification Opportunities for Columbia Convertible and Live Oak
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and Live is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Convertible Securitie and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Columbia Convertible 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 Convertible Securities are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Live Oak go up and down completely randomly.
Pair Corralation between Columbia Convertible and Live Oak
Assuming the 90 days horizon Columbia Convertible is expected to generate 2.7 times less return on investment than Live Oak. But when comparing it to its historical volatility, Columbia Convertible Securities is 1.26 times less risky than Live Oak. It trades about 0.15 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,028 in Live Oak Health on November 4, 2024 and sell it today you would earn a total of 101.00 from holding Live Oak Health or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Convertible Securitie vs. Live Oak Health
Performance |
| Timeline |
| Columbia Convertible |
| Live Oak Health |
Columbia Convertible and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Live Oak
The main advantage of trading using opposite Columbia Convertible and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| Columbia Convertible vs. Tiaa Cref Large Cap Value | Columbia Convertible vs. Oakmark Fund Investor | Columbia Convertible vs. Dodge Cox Stock | Columbia Convertible vs. Fidelity Large Cap |
| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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