Correlation Between Columbia Convertible and Aig Government
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Columbia Convertible and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Aig Government.
Diversification Opportunities for Columbia Convertible and Aig Government
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Aig is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Convertible Securitie and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Aig Government go up and down completely randomly.
Pair Corralation between Columbia Convertible and Aig Government
Assuming the 90 days horizon Columbia Convertible Securities is expected to generate 2.94 times more return on investment than Aig Government. However, Columbia Convertible is 2.94 times more volatile than Aig Government Money. It trades about 0.17 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.18 per unit of risk. If you would invest 2,210 in Columbia Convertible Securities on November 8, 2024 and sell it today you would earn a total of 44.00 from holding Columbia Convertible Securities or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Convertible Securitie vs. Aig Government Money
Performance |
| Timeline |
| Columbia Convertible |
| Aig Government Money |
Columbia Convertible and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Aig Government
The main advantage of trading using opposite Columbia Convertible and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Columbia Convertible vs. The Hartford Healthcare | Columbia Convertible vs. Health Care Ultrasector | Columbia Convertible vs. The Gabelli Healthcare | Columbia Convertible vs. Allianzgi Health Sciences |
| Aig Government vs. Hartford Municipal Short | Aig Government vs. Ultra Short Fixed Income | Aig Government vs. Nuveen Short Term | Aig Government vs. Old Westbury Short Term |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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