Correlation Between Investec Emerging and Columbia Contrarian
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Columbia Contrarian 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 Investec Emerging and Columbia Contrarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Columbia Trarian Core, you can compare the effects of market volatilities on Investec Emerging and Columbia Contrarian 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 Investec Emerging with a short position of Columbia Contrarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Columbia Contrarian.
Diversification Opportunities for Investec Emerging and Columbia Contrarian
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investec and COLUMBIA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Columbia Trarian Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Trarian Core and Investec Emerging 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 Investec Emerging Markets are associated (or correlated) with Columbia Contrarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Trarian Core has no effect on the direction of Investec Emerging i.e., Investec Emerging and Columbia Contrarian go up and down completely randomly.
Pair Corralation between Investec Emerging and Columbia Contrarian
Assuming the 90 days horizon Investec Emerging is expected to generate 1.46 times less return on investment than Columbia Contrarian. In addition to that, Investec Emerging is 1.16 times more volatile than Columbia Trarian Core. It trades about 0.09 of its total potential returns per unit of risk. Columbia Trarian Core is currently generating about 0.16 per unit of volatility. If you would invest 2,766 in Columbia Trarian Core on August 25, 2024 and sell it today you would earn a total of 1,089 from holding Columbia Trarian Core or generate 39.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Investec Emerging Markets vs. Columbia Trarian Core
Performance |
| Timeline |
| Investec Emerging Markets |
| Columbia Trarian Core |
Investec Emerging and Columbia Contrarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Columbia Contrarian
The main advantage of trading using opposite Investec Emerging and Columbia Contrarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Columbia Contrarian 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 Contrarian will offset losses from the drop in Columbia Contrarian's long position.| Investec Emerging vs. Gmo Equity Allocation | Investec Emerging vs. Nuveen Winslow Large Cap | Investec Emerging vs. Old Westbury Large | Investec Emerging vs. Legg Mason Bw |
| Columbia Contrarian vs. Artisan Emerging Markets | Columbia Contrarian vs. Pnc Emerging Markets | Columbia Contrarian vs. Nasdaq 100 2x Strategy | Columbia Contrarian vs. Investec Emerging Markets |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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