Correlation Between Columbia Seligman and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Aberdeen 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 Aberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Seligman Premium and Aberdeen Eq Long Short, you can compare the effects of market volatilities on Columbia Seligman and Aberdeen 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 Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Aberdeen.
Diversification Opportunities for Columbia Seligman and Aberdeen
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Aberdeen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Premium and Aberdeen Eq Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Eq Long 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 Premium are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Eq Long has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Aberdeen go up and down completely randomly.
Pair Corralation between Columbia Seligman and Aberdeen
Considering the 90-day investment horizon Columbia Seligman Premium is expected to generate 1.08 times more return on investment than Aberdeen. However, Columbia Seligman is 1.08 times more volatile than Aberdeen Eq Long Short. It trades about 0.07 of its potential returns per unit of risk. Aberdeen Eq Long Short is currently generating about 0.04 per unit of risk. If you would invest 2,206 in Columbia Seligman Premium on August 26, 2024 and sell it today you would earn a total of 1,141 from holding Columbia Seligman Premium or generate 51.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.77% |
| Values | Daily Returns |
Columbia Seligman Premium vs. Aberdeen Eq Long Short
Performance |
| Timeline |
| Columbia Seligman Premium |
| Aberdeen Eq Long |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Columbia Seligman and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Seligman and Aberdeen
The main advantage of trading using opposite Columbia Seligman and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Aberdeen 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 Aberdeen will offset losses from the drop in Aberdeen's long position.| Columbia Seligman vs. Eaton Vance Enhanced | Columbia Seligman vs. BlackRock Utility Infrastructure | Columbia Seligman vs. BlackRock Health Sciences | Columbia Seligman vs. BlackRock Science Tech |
| Aberdeen vs. Alger Health Sciences | Aberdeen vs. Alphacentric Lifesci Healthcare | Aberdeen vs. Live Oak Health | Aberdeen vs. Prudential Health Sciences |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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