Correlation Between Ab Value and Columbia Integrated

Can any of the company-specific risk be diversified away by investing in both Ab Value and Columbia Integrated 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 Ab Value and Columbia Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Value Fund and Columbia Integrated Large, you can compare the effects of market volatilities on Ab Value and Columbia Integrated 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 Ab Value with a short position of Columbia Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Columbia Integrated.

Diversification Opportunities for Ab Value and Columbia Integrated

0.95

Correlation Coefficient

Ab Value  Columbia Integrated

Almost no diversification

The 3 months correlation between ABVCX and Columbia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Columbia Integrated Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Integrated Large and Ab Value 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 Ab Value Fund are associated (or correlated) with Columbia Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Integrated Large has no effect on the direction of Ab Value i.e., Ab Value and Columbia Integrated go up and down completely randomly.

Pair Corralation between Ab Value and Columbia Integrated

Assuming the 90 days horizon Ab Value is expected to generate 4.76 times less return on investment than Columbia Integrated. In addition to that, Ab Value is 1.05 times more volatile than Columbia Integrated Large. It trades about 0.0 of its total potential returns per unit of risk. Columbia Integrated Large is currently generating about 0.01 per unit of volatility. If you would invest  1,011  in Columbia Integrated Large on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Columbia Integrated Large or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ab Value Fund  vs.  Columbia Integrated Large

Ab Value Fund

Risk-Adjusted Performance

Weak

Over the last 90 days Ab Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Ab Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Integrated Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Integrated Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Columbia Integrated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Value and Columbia Integrated

The main advantage of trading using opposite Ab Value and Columbia Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Columbia Integrated 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 Integrated will offset losses from the drop in Columbia Integrated's long position.

The idea behind Ab Value Fund and Columbia Integrated Large pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.