Correlation Between Columbia Seligman and Multi-manager High
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Multi-manager High 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 Columbia Seligman and Multi-manager High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Seligman Global and Multi Manager High Yield, you can compare the effects of market volatilities on Columbia Seligman and Multi-manager High 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 Columbia Seligman with a short position of Multi-manager High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Multi-manager High.
Diversification Opportunities for Columbia Seligman and Multi-manager High
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Multi-manager is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Global and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High and Columbia Seligman 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 Columbia Seligman Global are associated (or correlated) with Multi-manager High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Multi-manager High go up and down completely randomly.
Pair Corralation between Columbia Seligman and Multi-manager High
Assuming the 90 days horizon Columbia Seligman Global is expected to generate 7.06 times more return on investment than Multi-manager High. However, Columbia Seligman is 7.06 times more volatile than Multi Manager High Yield. It trades about 0.41 of its potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.13 per unit of risk. If you would invest 7,613 in Columbia Seligman Global on September 1, 2024 and sell it today you would earn a total of 652.00 from holding Columbia Seligman Global or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Columbia Seligman Global vs. Multi Manager High Yield
Performance |
| Timeline |
| Columbia Seligman Global |
| Multi Manager High |
Columbia Seligman and Multi-manager High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Seligman and Multi-manager High
The main advantage of trading using opposite Columbia Seligman and Multi-manager High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Multi-manager High 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 Multi-manager High will offset losses from the drop in Multi-manager High's long position.| Columbia Seligman vs. Multi Manager High Yield | Columbia Seligman vs. Virtus High Yield | Columbia Seligman vs. Federated Institutional High | Columbia Seligman vs. Fidelity Capital Income |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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