Correlation Between NYSE Composite and Columbia Convertible
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Columbia Convertible 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 Convertible 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 Convertible Securities, you can compare the effects of market volatilities on NYSE Composite and Columbia Convertible 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 Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Columbia Convertible.
Diversification Opportunities for NYSE Composite and Columbia Convertible
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Columbia is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Columbia Convertible Securitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Convertible 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 Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Convertible has no effect on the direction of NYSE Composite i.e., NYSE Composite and Columbia Convertible go up and down completely randomly.
Pair Corralation between NYSE Composite and Columbia Convertible
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Columbia Convertible. In addition to that, NYSE Composite is 1.01 times more volatile than Columbia Convertible Securities. It trades about -0.21 of its total potential returns per unit of risk. Columbia Convertible Securities is currently generating about -0.04 per unit of volatility. If you would invest 2,242 in Columbia Convertible Securities on October 11, 2024 and sell it today you would lose (15.00) from holding Columbia Convertible Securities or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Columbia Convertible Securitie
Performance |
| Timeline |
NYSE Composite and Columbia Convertible Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Columbia Convertible Securities
Pair trading matchups for Columbia Convertible
Pair Trading with NYSE Composite and Columbia Convertible
The main advantage of trading using opposite NYSE Composite and Columbia Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Columbia Convertible 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 Convertible will offset losses from the drop in Columbia Convertible's long position.| NYSE Composite vs. Femasys | NYSE Composite vs. Teradyne | NYSE Composite vs. Toro Co | NYSE Composite vs. Space Communication |
| Columbia Convertible vs. Ab Global Bond | Columbia Convertible vs. Barings Global Floating | Columbia Convertible vs. Commonwealth Global Fund | Columbia Convertible vs. Artisan Global Opportunities |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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