Correlation Between Columbia Commodity and Champlain Mid

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

By analyzing existing cross correlation between Columbia Modity Strategy and Champlain Mid Cap, you can compare the effects of market volatilities on Columbia Commodity and Champlain Mid 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 Columbia Commodity with a short position of Champlain Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Commodity and Champlain Mid.

Diversification Opportunities for Columbia Commodity and Champlain Mid

-0.53

Correlation Coefficient

Columbia Commodity  Champlain Mid

Excellent diversification

The 3 months correlation between Columbia and Champlain is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Modity Strategy and Champlain Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Mid Cap and Columbia Commodity 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 Columbia Modity Strategy are associated (or correlated) with Champlain Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Mid Cap has no effect on the direction of Columbia Commodity i.e., Columbia Commodity and Champlain Mid go up and down completely randomly.

Pair Corralation between Columbia Commodity and Champlain Mid

Assuming the 90 days horizon Columbia Modity Strategy is expected to generate 0.47 times more return on investment than Champlain Mid. However, Columbia Modity Strategy is 2.13 times less risky than Champlain Mid. It trades about 0.15 of its potential returns per unit of risk. Champlain Mid Cap is currently generating about -0.14 per unit of risk. If you would invest  923.00  in Columbia Modity Strategy on December 2, 2024 and sell it today you would earn a total of  59.00  from holding Columbia Modity Strategy or generate 6.39% return on investment over 90 days.

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

Columbia Modity Strategy  vs.  Champlain Mid Cap

Columbia Modity Strategy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Modity Strategy are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Commodity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Champlain Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Columbia Commodity and Champlain Mid

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

The idea behind Columbia Modity Strategy and Champlain Mid Cap 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 Transaction History module to view history of all your transactions and understand their impact on performance.