Correlation Between Columbia Emerging and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Columbia Emerging and Ep Emerging 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 Emerging and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Emerging Markets and Ep Emerging Markets, you can compare the effects of market volatilities on Columbia Emerging and Ep Emerging 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 Emerging with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Emerging and Ep Emerging.
Diversification Opportunities for Columbia Emerging and Ep Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and EPASX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Emerging Markets and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Columbia Emerging 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 Emerging Markets are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Columbia Emerging i.e., Columbia Emerging and Ep Emerging go up and down completely randomly.
Pair Corralation between Columbia Emerging and Ep Emerging
Assuming the 90 days horizon Columbia Emerging Markets is expected to generate 0.93 times more return on investment than Ep Emerging. However, Columbia Emerging Markets is 1.08 times less risky than Ep Emerging. It trades about 0.09 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.07 per unit of risk. If you would invest 1,348 in Columbia Emerging Markets on September 13, 2024 and sell it today you would earn a total of 18.00 from holding Columbia Emerging Markets or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Emerging Markets vs. Ep Emerging Markets
Performance |
| Timeline |
| Columbia Emerging Markets |
| Ep Emerging Markets |
Columbia Emerging and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Emerging and Ep Emerging
The main advantage of trading using opposite Columbia Emerging and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Emerging position performs unexpectedly, Ep Emerging 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Columbia Emerging vs. T Rowe Price | Columbia Emerging vs. Rational Strategic Allocation | Columbia Emerging vs. Dodge Cox Stock | Columbia Emerging vs. Aqr Large Cap |
| Ep Emerging vs. Europac International Bond | Ep Emerging vs. Europac International Dividend | Ep Emerging vs. Ep Emerging Markets | Ep Emerging vs. Investment Managers Series |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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