Correlation Between Pear Tree and Columbia Convertible
Can any of the company-specific risk be diversified away by investing in both Pear Tree 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 Pear Tree and Columbia Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pear Tree Polaris and Columbia Vertible Securities, you can compare the effects of market volatilities on Pear Tree 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 Pear Tree with a short position of Columbia Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Columbia Convertible.
Diversification Opportunities for Pear Tree and Columbia Convertible
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pear and Columbia is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Polaris and Columbia Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Convertible and Pear Tree 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 Pear Tree Polaris 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 Pear Tree i.e., Pear Tree and Columbia Convertible go up and down completely randomly.
Pair Corralation between Pear Tree and Columbia Convertible
Assuming the 90 days horizon Pear Tree Polaris is expected to under-perform the Columbia Convertible. In addition to that, Pear Tree is 1.27 times more volatile than Columbia Vertible Securities. It trades about -0.15 of its total potential returns per unit of risk. Columbia Vertible Securities is currently generating about 0.58 per unit of volatility. If you would invest 2,199 in Columbia Vertible Securities on September 2, 2024 and sell it today you would earn a total of 135.00 from holding Columbia Vertible Securities or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pear Tree Polaris vs. Columbia Vertible Securities
Performance |
| Timeline |
| Pear Tree Polaris |
| Columbia Convertible |
Pear Tree and Columbia Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pear Tree and Columbia Convertible
The main advantage of trading using opposite Pear Tree and Columbia Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pear Tree 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.| Pear Tree vs. Federated Ohio Municipal | Pear Tree vs. Old Westbury Municipal | Pear Tree vs. T Rowe Price | Pear Tree vs. Ishares Municipal Bond |
| Columbia Convertible vs. Legg Mason Partners | Columbia Convertible vs. Qs Small Capitalization | Columbia Convertible vs. Small Pany Growth | Columbia Convertible vs. Baird Smallmid 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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