Correlation Between Columbia Greater and Gmo Resources
Can any of the company-specific risk be diversified away by investing in both Columbia Greater and Gmo Resources 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 Greater and Gmo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Greater China and Gmo Resources, you can compare the effects of market volatilities on Columbia Greater and Gmo Resources 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 Greater with a short position of Gmo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Greater and Gmo Resources.
Diversification Opportunities for Columbia Greater and Gmo Resources
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Gmo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Greater China and Gmo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Resources and Columbia Greater 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 Greater China are associated (or correlated) with Gmo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Resources has no effect on the direction of Columbia Greater i.e., Columbia Greater and Gmo Resources go up and down completely randomly.
Pair Corralation between Columbia Greater and Gmo Resources
Assuming the 90 days horizon Columbia Greater China is expected to generate 1.41 times more return on investment than Gmo Resources. However, Columbia Greater is 1.41 times more volatile than Gmo Resources. It trades about 0.02 of its potential returns per unit of risk. Gmo Resources is currently generating about -0.04 per unit of risk. If you would invest 3,229 in Columbia Greater China on September 3, 2024 and sell it today you would earn a total of 43.00 from holding Columbia Greater China or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Greater China vs. Gmo Resources
Performance |
| Timeline |
| Columbia Greater China |
| Gmo Resources |
Columbia Greater and Gmo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Greater and Gmo Resources
The main advantage of trading using opposite Columbia Greater and Gmo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Greater position performs unexpectedly, Gmo Resources 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 Gmo Resources will offset losses from the drop in Gmo Resources' long position.| Columbia Greater vs. Gabelli Gold Fund | Columbia Greater vs. Goldman Sachs Clean | Columbia Greater vs. Precious Metals And | Columbia Greater vs. Great West Goldman Sachs |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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