Correlation Between Western Asset and Columbia Vertible
Can any of the company-specific risk be diversified away by investing in both Western Asset and Columbia Vertible 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 Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Columbia Vertible Securities, you can compare the effects of market volatilities on Western Asset and Columbia Vertible 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 Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Columbia Vertible.
Diversification Opportunities for Western Asset and Columbia Vertible
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Columbia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Columbia Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Vertible 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 Municipal are associated (or correlated) with Columbia Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Vertible has no effect on the direction of Western Asset i.e., Western Asset and Columbia Vertible go up and down completely randomly.
Pair Corralation between Western Asset and Columbia Vertible
Assuming the 90 days horizon Western Asset is expected to generate 6.8 times less return on investment than Columbia Vertible. But when comparing it to its historical volatility, Western Asset Municipal is 2.02 times less risky than Columbia Vertible. It trades about 0.02 of its potential returns per unit of risk. Columbia Vertible Securities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,802 in Columbia Vertible Securities on September 13, 2024 and sell it today you would earn a total of 432.00 from holding Columbia Vertible Securities or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Asset Municipal vs. Columbia Vertible Securities
Performance |
| Timeline |
| Western Asset Municipal |
| Columbia Vertible |
Western Asset and Columbia Vertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Columbia Vertible
The main advantage of trading using opposite Western Asset and Columbia Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Columbia Vertible 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 Vertible will offset losses from the drop in Columbia Vertible's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Columbia Vertible vs. The National Tax Free | Columbia Vertible vs. T Rowe Price | Columbia Vertible vs. Multisector Bond Sma | Columbia Vertible vs. Dreyfusstandish Global Fixed |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |