Correlation Between Amg River and Columbia Acorn

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

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

Diversification Opportunities for Amg River and Columbia Acorn

0.0

Correlation Coefficient

Amg River  Columbia Acorn

Pay attention - limited upside

The 3 months correlation between Amg and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Columbia Acorn Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Acorn and Amg River 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 Amg River Road are associated (or correlated) with Columbia Acorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Acorn has no effect on the direction of Amg River i.e., Amg River and Columbia Acorn go up and down completely randomly.

Pair Corralation between Amg River and Columbia Acorn

If you would invest (100.00) in Columbia Acorn Fund on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Columbia Acorn Fund or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Amg River Road  vs.  Columbia Acorn Fund

Amg River Road

Risk-Adjusted Performance

Very Weak

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

Columbia Acorn

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Amg River and Columbia Acorn

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

The idea behind Amg River Road and Columbia Acorn Fund 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.