Correlation Between Columbia Global and Catalystwarrington

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

By analyzing existing cross correlation between Columbia Global Technology and Catalystwarrington Strategic Program, you can compare the effects of market volatilities on Columbia Global and Catalystwarrington 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 Catalystwarrington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Global and Catalystwarrington.

Diversification Opportunities for Columbia Global and Catalystwarrington

-0.22

Correlation Coefficient

Columbia Global  Catalystwarrington

Very good diversification

The 3 months correlation between Columbia and Catalystwarrington is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Global Technology and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystwarrington 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 Technology are associated (or correlated) with Catalystwarrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystwarrington has no effect on the direction of Columbia Global i.e., Columbia Global and Catalystwarrington go up and down completely randomly.

Pair Corralation between Columbia Global and Catalystwarrington

Assuming the 90 days horizon Columbia Global Technology is expected to generate 2.34 times more return on investment than Catalystwarrington. However, Columbia Global is 2.34 times more volatile than Catalystwarrington Strategic Program. It trades about 0.02 of its potential returns per unit of risk. Catalystwarrington Strategic Program is currently generating about -0.14 per unit of risk. If you would invest  9,268  in Columbia Global Technology on October 9, 2024 and sell it today you would earn a total of  77.00  from holding Columbia Global Technology or generate 0.83% return on investment over 90 days.

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

Columbia Global Technology  vs.  Catalystwarrington Strategic P

Columbia Global Tech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Global Technology are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Columbia Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystwarrington

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalystwarrington Strategic Program has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Catalystwarrington 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 Global and Catalystwarrington

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

The idea behind Columbia Global Technology and Catalystwarrington Strategic Program 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.