Correlation Between Columbia Porate and Smead Value

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

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

Diversification Opportunities for Columbia Porate and Smead Value

0.0

Correlation Coefficient

Columbia Porate  Smead Value

Pay attention - limited upside

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

Pair Corralation between Columbia Porate and Smead Value

If you would invest (100.00) in Columbia Porate Income on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Columbia Porate Income 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

Columbia Porate Income  vs.  Smead Value Fund

Columbia Porate Income

Risk-Adjusted Performance

Very Weak

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

Smead Value Fund

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Columbia Porate and Smead Value

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

The idea behind Columbia Porate Income and Smead Value 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.