Correlation Between Columbia Global and Columbia Pacificasia
Can any of the company-specific risk be diversified away by investing in both Columbia Global and Columbia Pacificasia 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 Global and Columbia Pacificasia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Global Equity and Columbia Pacificasia Fund, you can compare the effects of market volatilities on Columbia Global and Columbia Pacificasia 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 Global with a short position of Columbia Pacificasia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Global and Columbia Pacificasia.
Diversification Opportunities for Columbia Global and Columbia Pacificasia
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Columbia is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Global Equity and Columbia Pacificasia Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Pacificasia and Columbia Global 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 Global Equity are associated (or correlated) with Columbia Pacificasia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Pacificasia has no effect on the direction of Columbia Global i.e., Columbia Global and Columbia Pacificasia go up and down completely randomly.
Pair Corralation between Columbia Global and Columbia Pacificasia
Assuming the 90 days horizon Columbia Global Equity is expected to generate 0.53 times more return on investment than Columbia Pacificasia. However, Columbia Global Equity is 1.9 times less risky than Columbia Pacificasia. It trades about -0.07 of its potential returns per unit of risk. Columbia Pacificasia Fund is currently generating about -0.09 per unit of risk. If you would invest 1,288 in Columbia Global Equity on October 8, 2024 and sell it today you would lose (57.00) from holding Columbia Global Equity or give up 4.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Columbia Global Equity vs. Columbia Pacificasia Fund
Performance |
Timeline |
Columbia Global Equity |
Columbia Pacificasia |
Columbia Global and Columbia Pacificasia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Columbia Global and Columbia Pacificasia
The main advantage of trading using opposite Columbia Global and Columbia Pacificasia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Global position performs unexpectedly, Columbia Pacificasia 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 Pacificasia will offset losses from the drop in Columbia Pacificasia's long position.Columbia Global vs. Columbia Porate Income | Columbia Global vs. Columbia Ultra Short | Columbia Global vs. Columbia Treasury Index | Columbia Global vs. Multi Manager Directional Alternative |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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