Correlation Between Western Asset and Columbia Short
Can any of the company-specific risk be diversified away by investing in both Western Asset and Columbia Short 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 Western Asset and Columbia Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Columbia Short Term, you can compare the effects of market volatilities on Western Asset and Columbia Short 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 Western Asset with a short position of Columbia Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Columbia Short.
Diversification Opportunities for Western Asset and Columbia Short
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Columbia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Columbia Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Short Term and Western Asset 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 Western Asset High are associated (or correlated) with Columbia Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Short Term has no effect on the direction of Western Asset i.e., Western Asset and Columbia Short go up and down completely randomly.
Pair Corralation between Western Asset and Columbia Short
Assuming the 90 days horizon Western Asset is expected to generate 1.97 times less return on investment than Columbia Short. In addition to that, Western Asset is 2.36 times more volatile than Columbia Short Term. It trades about 0.05 of its total potential returns per unit of risk. Columbia Short Term is currently generating about 0.24 per unit of volatility. If you would invest 1,014 in Columbia Short Term on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Columbia Short Term or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset High vs. Columbia Short Term
Performance |
| Timeline |
| Western Asset High |
| Columbia Short Term |
Western Asset and Columbia Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Columbia Short
The main advantage of trading using opposite Western Asset and Columbia Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Columbia Short 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 Short will offset losses from the drop in Columbia Short's long position.| Western Asset vs. SCOR PK | Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Via Renewables | Western Asset vs. Bondbloxx ETF Trust |
| Columbia Short vs. Goldman Sachs Technology | Columbia Short vs. Towpath Technology | Columbia Short vs. Blackrock Science Technology | Columbia Short vs. Fidelity Advisor Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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