Correlation Between Inverse Nasdaq-100 and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq-100 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 Inverse Nasdaq-100 and Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Nasdaq 100 Strategy and Columbia Emerging Markets, you can compare the effects of market volatilities on Inverse Nasdaq-100 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 Inverse Nasdaq-100 with a short position of Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq-100 and Columbia Emerging.
Diversification Opportunities for Inverse Nasdaq-100 and Columbia Emerging
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inverse and Columbia is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 Strategy 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 Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy 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 Inverse Nasdaq-100 i.e., Inverse Nasdaq-100 and Columbia Emerging go up and down completely randomly.
Pair Corralation between Inverse Nasdaq-100 and Columbia Emerging
Assuming the 90 days horizon Inverse Nasdaq 100 Strategy is expected to under-perform the Columbia Emerging. In addition to that, Inverse Nasdaq-100 is 1.18 times more volatile than Columbia Emerging Markets. It trades about -0.11 of its total potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.09 per unit of volatility. If you would invest 1,208 in Columbia Emerging Markets on November 3, 2024 and sell it today you would earn a total of 129.00 from holding Columbia Emerging Markets or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Nasdaq 100 Strategy vs. Columbia Emerging Markets
Performance |
| Timeline |
| Inverse Nasdaq 100 |
| Columbia Emerging Markets |
Inverse Nasdaq-100 and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Nasdaq-100 and Columbia Emerging
The main advantage of trading using opposite Inverse Nasdaq-100 and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq-100 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.| Inverse Nasdaq-100 vs. Multisector Bond Sma | Inverse Nasdaq-100 vs. Ultra Short Fixed Income | Inverse Nasdaq-100 vs. Blrc Sgy Mnp | Inverse Nasdaq-100 vs. Dreyfusstandish Global Fixed |
| Columbia Emerging vs. Fidelity Advisor Financial | Columbia Emerging vs. Rmb Mendon Financial | Columbia Emerging vs. Transamerica Financial Life | Columbia Emerging vs. Prudential Financial Services |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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