Correlation Between Columbia Marsico and Alliancebernstein

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

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

Diversification Opportunities for Columbia Marsico and Alliancebernstein

0.76

Correlation Coefficient

Columbia Marsico  Alliancebernstein

Poor diversification

The 3 months correlation between Columbia and Alliancebernstein is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Marsico Growth and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Columbia Marsico 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 Marsico Growth are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Columbia Marsico i.e., Columbia Marsico and Alliancebernstein go up and down completely randomly.

Pair Corralation between Columbia Marsico and Alliancebernstein

Assuming the 90 days horizon Columbia Marsico Growth is expected to generate 0.67 times more return on investment than Alliancebernstein. However, Columbia Marsico Growth is 1.49 times less risky than Alliancebernstein. It trades about -0.03 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.02 per unit of risk. If you would invest  1,003  in Columbia Marsico Growth on December 1, 2024 and sell it today you would lose (8.00) from holding Columbia Marsico Growth or give up 0.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Columbia Marsico Growth  vs.  Alliancebernstein National Mun

Columbia Marsico Growth

Risk-Adjusted Performance

Very Weak

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

Alliancebernstein

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Alliancebernstein 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 Marsico and Alliancebernstein

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

The idea behind Columbia Marsico Growth and Alliancebernstein National Municipal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.