Correlation Between Siit Large and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Siit Large and Columbia Small 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 Siit Large and Columbia Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Large Cap and Columbia Small Cap, you can compare the effects of market volatilities on Siit Large and Columbia Small 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 Siit Large with a short position of Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Columbia Small.
Diversification Opportunities for Siit Large and Columbia Small
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Columbia is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap and Siit Large 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 Siit Large Cap are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Siit Large i.e., Siit Large and Columbia Small go up and down completely randomly.
Pair Corralation between Siit Large and Columbia Small
Assuming the 90 days horizon Siit Large is expected to generate 2.19 times less return on investment than Columbia Small. But when comparing it to its historical volatility, Siit Large Cap is 1.31 times less risky than Columbia Small. It trades about 0.05 of its potential returns per unit of risk. Columbia Small Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,858 in Columbia Small Cap on August 30, 2024 and sell it today you would earn a total of 1,190 from holding Columbia Small Cap or generate 64.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Large Cap vs. Columbia Small Cap
Performance |
| Timeline |
| Siit Large Cap |
| Columbia Small Cap |
Siit Large and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Columbia Small
The main advantage of trading using opposite Siit Large and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Columbia Small 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 Small will offset losses from the drop in Columbia Small's long position.| Siit Large vs. Pace High Yield | Siit Large vs. Lord Abbett High | Siit Large vs. Msift High Yield | Siit Large vs. Prudential High Yield |
| Columbia Small vs. Eventide Healthcare Life | Columbia Small vs. Highland Longshort Healthcare | Columbia Small vs. Lord Abbett Health | Columbia Small vs. Hartford Healthcare Hls |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |