Correlation Between NYSE Composite and Columbia Acorn
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Columbia Acorn 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 NYSE Composite and Columbia Acorn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Columbia Acorn European, you can compare the effects of market volatilities on NYSE Composite and Columbia Acorn 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 NYSE Composite with a short position of Columbia Acorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Columbia Acorn.
Diversification Opportunities for NYSE Composite and Columbia Acorn
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Columbia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Columbia Acorn European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Acorn European and NYSE Composite 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 NYSE Composite are associated (or correlated) with Columbia Acorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Acorn European has no effect on the direction of NYSE Composite i.e., NYSE Composite and Columbia Acorn go up and down completely randomly.
Pair Corralation between NYSE Composite and Columbia Acorn
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.64 times more return on investment than Columbia Acorn. However, NYSE Composite is 1.56 times less risky than Columbia Acorn. It trades about 0.08 of its potential returns per unit of risk. Columbia Acorn European is currently generating about 0.03 per unit of risk. If you would invest 1,556,254 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 465,068 from holding NYSE Composite or generate 29.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Columbia Acorn European
Performance |
| Timeline |
NYSE Composite and Columbia Acorn Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Columbia Acorn European
Pair trading matchups for Columbia Acorn
Pair Trading with NYSE Composite and Columbia Acorn
The main advantage of trading using opposite NYSE Composite and Columbia Acorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Columbia Acorn 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 Columbia Acorn will offset losses from the drop in Columbia Acorn's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Columbia Acorn vs. Morgan Stanley European | Columbia Acorn vs. Columbia Emerging Markets | Columbia Acorn vs. Columbia Mortgage Opportunities | Columbia Acorn vs. Columbia Small Cap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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