Correlation Between Valic Company and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Valic Company and Columbia Small 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 Valic Company and Columbia Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Columbia Small Cap, you can compare the effects of market volatilities on Valic Company and Columbia Small 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 Valic Company with a short position of Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Columbia Small.
Diversification Opportunities for Valic Company and Columbia Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and Columbia is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap and Valic Company 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 Valic Company I are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Valic Company i.e., Valic Company and Columbia Small go up and down completely randomly.
Pair Corralation between Valic Company and Columbia Small
Assuming the 90 days horizon Valic Company I is expected to generate 0.98 times more return on investment than Columbia Small. However, Valic Company I is 1.02 times less risky than Columbia Small. It trades about 0.08 of its potential returns per unit of risk. Columbia Small Cap is currently generating about 0.05 per unit of risk. If you would invest 1,086 in Valic Company I on August 27, 2024 and sell it today you would earn a total of 296.00 from holding Valic Company I or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Columbia Small Cap
Performance |
| Timeline |
| Valic Company I |
| Columbia Small Cap |
Valic Company and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Columbia Small
The main advantage of trading using opposite Valic Company and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Columbia Small 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 Small will offset losses from the drop in Columbia Small's long position.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
| Columbia Small vs. Columbia Porate Income | Columbia Small vs. Columbia Ultra Short | Columbia Small vs. Columbia Ultra Short | Columbia Small vs. Columbia Treasury Index |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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