Correlation Between Nasdaq 100 and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Columbia Seligman 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 Seligman 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 Seligman Global, you can compare the effects of market volatilities on Nasdaq 100 and Columbia Seligman 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 Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Columbia Seligman.
Diversification Opportunities for Nasdaq 100 and Columbia Seligman
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Columbia is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Columbia Seligman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Global 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 Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Global has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Columbia Seligman go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Columbia Seligman
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 0.89 times more return on investment than Columbia Seligman. However, Nasdaq 100 Index Fund is 1.12 times less risky than Columbia Seligman. It trades about 0.1 of its potential returns per unit of risk. Columbia Seligman Global is currently generating about 0.08 per unit of risk. If you would invest 3,077 in Nasdaq 100 Index Fund on September 2, 2024 and sell it today you would earn a total of 2,185 from holding Nasdaq 100 Index Fund or generate 71.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Columbia Seligman Global
Performance |
| Timeline |
| Nasdaq 100 Index |
| Columbia Seligman Global |
Nasdaq 100 and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Columbia Seligman
The main advantage of trading using opposite Nasdaq 100 and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Columbia Seligman 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 Seligman will offset losses from the drop in Columbia Seligman's long position.| Nasdaq 100 vs. Pimco Global Multi Asset | Nasdaq 100 vs. Commonwealth Global Fund | Nasdaq 100 vs. Mirova Global Green | Nasdaq 100 vs. T Rowe Price |
| Columbia Seligman vs. Veea Inc | Columbia Seligman vs. VHAI | Columbia Seligman vs. VivoPower International PLC | Columbia Seligman vs. WEBTOON Entertainment Common |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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