Correlation Between Columbia Seligman and Aberdeen Equity
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Aberdeen Equity 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 Equity 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 Equity A, you can compare the effects of market volatilities on Columbia Seligman and Aberdeen Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Aberdeen Equity.
Diversification Opportunities for Columbia Seligman and Aberdeen Equity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Aberdeen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Premium and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Aberdeen Equity go up and down completely randomly.
Pair Corralation between Columbia Seligman and Aberdeen Equity
Considering the 90-day investment horizon Columbia Seligman Premium is expected to generate 1.52 times more return on investment than Aberdeen Equity. However, Columbia Seligman is 1.52 times more volatile than Aberdeen Equity A. It trades about 0.06 of its potential returns per unit of risk. Aberdeen Equity A is currently generating about 0.07 per unit of risk. If you would invest 3,111 in Columbia Seligman Premium on August 29, 2024 and sell it today you would earn a total of 281.00 from holding Columbia Seligman Premium or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Seligman Premium vs. Aberdeen Equity A
Performance |
| Timeline |
| Columbia Seligman Premium |
| Aberdeen Equity A |
Columbia Seligman and Aberdeen Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Seligman and Aberdeen Equity
The main advantage of trading using opposite Columbia Seligman and Aberdeen Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Aberdeen Equity 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 Equity will offset losses from the drop in Aberdeen Equity'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 Equity vs. Blrc Sgy Mnp | Aberdeen Equity vs. Artisan High Income | Aberdeen Equity vs. Ultra Short Fixed Income | Aberdeen Equity vs. Ab Global Bond |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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