Correlation Between Western Assets and Columbia Global
Can any of the company-specific risk be diversified away by investing in both Western Assets and Columbia Global 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 Assets and Columbia Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Assets Emerging and Columbia Global Dividend, you can compare the effects of market volatilities on Western Assets and Columbia Global 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 Assets with a short position of Columbia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Columbia Global.
Diversification Opportunities for Western Assets and Columbia Global
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Columbia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Columbia Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Dividend and Western Assets 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 Assets Emerging are associated (or correlated) with Columbia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Dividend has no effect on the direction of Western Assets i.e., Western Assets and Columbia Global go up and down completely randomly.
Pair Corralation between Western Assets and Columbia Global
Assuming the 90 days horizon Western Assets is expected to generate 1.08 times less return on investment than Columbia Global. But when comparing it to its historical volatility, Western Assets Emerging is 1.85 times less risky than Columbia Global. It trades about 0.1 of its potential returns per unit of risk. Columbia Global Dividend is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,629 in Columbia Global Dividend on August 28, 2024 and sell it today you would earn a total of 378.00 from holding Columbia Global Dividend or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Columbia Global Dividend
Performance |
| Timeline |
| Western Assets Emerging |
| Columbia Global Dividend |
Western Assets and Columbia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Columbia Global
The main advantage of trading using opposite Western Assets and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Columbia Global 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 Global will offset losses from the drop in Columbia Global's long position.| Western Assets vs. Moderately Aggressive Balanced | Western Assets vs. Wisdomtree Siegel Moderate | Western Assets vs. Pgim Conservative Retirement | Western Assets vs. Lifestyle Ii Moderate |
| Columbia Global vs. Guggenheim Managed Futures | Columbia Global vs. Ab Bond Inflation | Columbia Global vs. Ab Municipal Bond | Columbia Global vs. Arrow Managed Futures |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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