Correlation Between Columbia Seligman and Global X
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Global X 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 Global X 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 Global X Funds, you can compare the effects of market volatilities on Columbia Seligman and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Global X.
Diversification Opportunities for Columbia Seligman and Global X
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and Global is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Premium and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Global X go up and down completely randomly.
Pair Corralation between Columbia Seligman and Global X
Considering the 90-day investment horizon Columbia Seligman is expected to generate 1.4 times less return on investment than Global X. In addition to that, Columbia Seligman is 1.32 times more volatile than Global X Funds. It trades about 0.08 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.15 per unit of volatility. If you would invest 2,454 in Global X Funds on November 1, 2024 and sell it today you would earn a total of 1,494 from holding Global X Funds or generate 60.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.21% |
| Values | Daily Returns |
Columbia Seligman Premium vs. Global X Funds
Performance |
| Timeline |
| Columbia Seligman Premium |
| Global X Funds |
Columbia Seligman and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Seligman and Global X
The main advantage of trading using opposite Columbia Seligman and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. First Trust Exchange Traded | Global X vs. Ultimus Managers Trust | Global X vs. Horizon Kinetics Medical | Global X vs. Harbor Health Care |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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