Correlation Between NYSE Composite and Columbia Multi
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Columbia Multi 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 Multi 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 Multi Sector Municipal, you can compare the effects of market volatilities on NYSE Composite and Columbia Multi 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 Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Columbia Multi.
Diversification Opportunities for NYSE Composite and Columbia Multi
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Columbia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Columbia Multi Sector Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Multi Sector 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 Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Multi Sector has no effect on the direction of NYSE Composite i.e., NYSE Composite and Columbia Multi go up and down completely randomly.
Pair Corralation between NYSE Composite and Columbia Multi
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.42 times more return on investment than Columbia Multi. However, NYSE Composite is 1.42 times more volatile than Columbia Multi Sector Municipal. It trades about 0.13 of its potential returns per unit of risk. Columbia Multi Sector Municipal is currently generating about 0.15 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Columbia Multi Sector Municipa
Performance |
| Timeline |
NYSE Composite and Columbia Multi Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Columbia Multi Sector Municipal
Pair trading matchups for Columbia Multi
Pair Trading with NYSE Composite and Columbia Multi
The main advantage of trading using opposite NYSE Composite and Columbia Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Columbia Multi 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 Multi will offset losses from the drop in Columbia Multi's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Columbia Multi vs. BlackRock Intermediate Muni | Columbia Multi vs. SSGA Active Trust | Columbia Multi vs. SPDR MarketAxess Investment | Columbia Multi vs. SSGA Active Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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