Correlation Between Columbia Convertible and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Investec Emerging 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 Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Columbia Convertible and Investec Emerging 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 Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Investec Emerging.
Diversification Opportunities for Columbia Convertible and Investec Emerging
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Columbia and Investec is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Convertible Securitie and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Investec Emerging go up and down completely randomly.
Pair Corralation between Columbia Convertible and Investec Emerging
Assuming the 90 days horizon Columbia Convertible Securities is expected to generate 1.4 times more return on investment than Investec Emerging. However, Columbia Convertible is 1.4 times more volatile than Investec Emerging Markets. It trades about -0.08 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 2,255 in Columbia Convertible Securities on October 10, 2024 and sell it today you would lose (28.00) from holding Columbia Convertible Securities or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Columbia Convertible Securitie vs. Investec Emerging Markets
Performance |
| Timeline |
| Columbia Convertible |
| Investec Emerging Markets |
Columbia Convertible and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Investec Emerging
The main advantage of trading using opposite Columbia Convertible and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Columbia Convertible vs. Ab Global Bond | Columbia Convertible vs. Barings Global Floating | Columbia Convertible vs. Commonwealth Global Fund | Columbia Convertible vs. Artisan Global Opportunities |
| Investec Emerging vs. Adams Natural Resources | Investec Emerging vs. Alpsalerian Energy Infrastructure | Investec Emerging vs. Blackrock All Cap Energy | Investec Emerging vs. Firsthand Alternative Energy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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