Correlation Between Nasdaq 100 and Columbia Flexible
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Columbia Flexible 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 Nasdaq 100 and Columbia Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Columbia Flexible Capital, you can compare the effects of market volatilities on Nasdaq 100 and Columbia Flexible 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 Nasdaq 100 with a short position of Columbia Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Columbia Flexible.
Diversification Opportunities for Nasdaq 100 and Columbia Flexible
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Columbia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Columbia Flexible Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Flexible Capital and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Columbia Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Flexible Capital has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Columbia Flexible go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Columbia Flexible
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 2.51 times more return on investment than Columbia Flexible. However, Nasdaq 100 is 2.51 times more volatile than Columbia Flexible Capital. It trades about 0.1 of its potential returns per unit of risk. Columbia Flexible Capital is currently generating about 0.17 per unit of risk. If you would invest 4,088 in Nasdaq 100 Index Fund on September 14, 2024 and sell it today you would earn a total of 1,348 from holding Nasdaq 100 Index Fund or generate 32.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Columbia Flexible Capital
Performance |
| Timeline |
| Nasdaq 100 Index |
| Columbia Flexible Capital |
Nasdaq 100 and Columbia Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Columbia Flexible
The main advantage of trading using opposite Nasdaq 100 and Columbia Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Columbia Flexible 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 Flexible will offset losses from the drop in Columbia Flexible's long position.| Nasdaq 100 vs. Qs Large Cap | Nasdaq 100 vs. Lord Abbett Affiliated | Nasdaq 100 vs. Dunham Large Cap | Nasdaq 100 vs. Dodge Cox Stock |
| Columbia Flexible vs. L Abbett Fundamental | Columbia Flexible vs. T Rowe Price | Columbia Flexible vs. Nasdaq 100 Index Fund | Columbia Flexible vs. Multimedia Portfolio Multimedia |
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 Correlations module to find global opportunities by holding instruments from different markets.
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