Correlation Between NYSE Composite and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Columbia 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 NYSE Composite and Columbia Emerging 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 Emerging Markets, you can compare the effects of market volatilities on NYSE Composite and Columbia 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 NYSE Composite with a short position of Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Columbia Emerging.
Diversification Opportunities for NYSE Composite and Columbia Emerging
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Columbia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of NYSE Composite i.e., NYSE Composite and Columbia Emerging go up and down completely randomly.
Pair Corralation between NYSE Composite and Columbia Emerging
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.79 times more return on investment than Columbia Emerging. However, NYSE Composite is 1.27 times less risky than Columbia Emerging. It trades about 0.08 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Columbia Emerging Markets
Performance |
| Timeline |
NYSE Composite and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Columbia Emerging Markets
Pair trading matchups for Columbia Emerging
Pair Trading with NYSE Composite and Columbia Emerging
The main advantage of trading using opposite NYSE Composite and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Columbia 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 Columbia Emerging will offset losses from the drop in Columbia Emerging's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Columbia Emerging vs. Vanguard Emerging Markets | Columbia Emerging vs. Vanguard Emerging Markets | Columbia Emerging vs. HUMANA INC | Columbia Emerging vs. Aquagold International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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