Correlation Between Global Bond and Columbia Real
Can any of the company-specific risk be diversified away by investing in both Global Bond and Columbia Real 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 Global Bond and Columbia Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Bond Fund and Columbia Real Estate, you can compare the effects of market volatilities on Global Bond and Columbia Real 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 Global Bond with a short position of Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Bond and Columbia Real.
Diversification Opportunities for Global Bond and Columbia Real
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Columbia is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global Bond Fund and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate and Global Bond 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 Global Bond Fund are associated (or correlated) with Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Global Bond i.e., Global Bond and Columbia Real go up and down completely randomly.
Pair Corralation between Global Bond and Columbia Real
Assuming the 90 days horizon Global Bond is expected to generate 2.85 times less return on investment than Columbia Real. But when comparing it to its historical volatility, Global Bond Fund is 5.24 times less risky than Columbia Real. It trades about 0.1 of its potential returns per unit of risk. Columbia Real Estate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 888.00 in Columbia Real Estate on September 2, 2024 and sell it today you would earn a total of 282.00 from holding Columbia Real Estate or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Bond Fund vs. Columbia Real Estate
Performance |
| Timeline |
| Global Bond Fund |
| Columbia Real Estate |
Global Bond and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Bond and Columbia Real
The main advantage of trading using opposite Global Bond and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Bond position performs unexpectedly, Columbia Real 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 Real will offset losses from the drop in Columbia Real's long position.| Global Bond vs. Foreign Bond Fund | Global Bond vs. Emerging Markets Bond | Global Bond vs. High Yield Fund | Global Bond vs. Low Duration Fund |
| Columbia Real vs. Blue Current Global | Columbia Real vs. Kinetics Global Fund | Columbia Real vs. Barings Global Floating | Columbia Real vs. Mirova Global Green |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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