Correlation Between Columbia Moderate and Nationwide Amundi

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

By analyzing existing cross correlation between Columbia Moderate Growth and Nationwide Amundi Strategic, you can compare the effects of market volatilities on Columbia Moderate and Nationwide Amundi 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 Moderate with a short position of Nationwide Amundi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Moderate and Nationwide Amundi.

Diversification Opportunities for Columbia Moderate and Nationwide Amundi

0.03

Correlation Coefficient

Columbia Moderate  Nationwide Amundi

Significant diversification

The 3 months correlation between Columbia and Nationwide is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Moderate Growth and Nationwide Amundi Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Amundi and Columbia Moderate 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 Moderate Growth are associated (or correlated) with Nationwide Amundi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Amundi has no effect on the direction of Columbia Moderate i.e., Columbia Moderate and Nationwide Amundi go up and down completely randomly.

Pair Corralation between Columbia Moderate and Nationwide Amundi

Assuming the 90 days horizon Columbia Moderate Growth is expected to under-perform the Nationwide Amundi. In addition to that, Columbia Moderate is 7.64 times more volatile than Nationwide Amundi Strategic. It trades about -0.01 of its total potential returns per unit of risk. Nationwide Amundi Strategic is currently generating about 0.35 per unit of volatility. If you would invest  983.00  in Nationwide Amundi Strategic on December 22, 2024 and sell it today you would earn a total of  16.00  from holding Nationwide Amundi Strategic or generate 1.63% return on investment over 90 days.

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

Columbia Moderate Growth  vs.  Nationwide Amundi Strategic

Columbia Moderate Growth

Risk-Adjusted Performance

Very Weak

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

Nationwide Amundi

Risk-Adjusted Performance

Strong

Over the last 90 days Nationwide Amundi Strategic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Nationwide Amundi 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 Moderate and Nationwide Amundi

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

The idea behind Columbia Moderate Growth and Nationwide Amundi Strategic 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.