Correlation Between Columbia Thermostat and Hundredfold Select

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

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

Diversification Opportunities for Columbia Thermostat and Hundredfold Select

0.66

Correlation Coefficient

Columbia Thermostat  Hundredfold Select

Poor diversification

The 3 months correlation between Columbia and Hundredfold is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Thermostat Fund and Hundredfold Select Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hundredfold Select and Columbia Thermostat 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 Thermostat Fund are associated (or correlated) with Hundredfold Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hundredfold Select has no effect on the direction of Columbia Thermostat i.e., Columbia Thermostat and Hundredfold Select go up and down completely randomly.

Pair Corralation between Columbia Thermostat and Hundredfold Select

Assuming the 90 days horizon Columbia Thermostat is expected to generate 1.7 times less return on investment than Hundredfold Select. In addition to that, Columbia Thermostat is 1.09 times more volatile than Hundredfold Select Alternative. It trades about 0.12 of its total potential returns per unit of risk. Hundredfold Select Alternative is currently generating about 0.22 per unit of volatility. If you would invest  2,391  in Hundredfold Select Alternative on September 11, 2024 and sell it today you would earn a total of  97.00  from holding Hundredfold Select Alternative or generate 4.06% return on investment over 90 days.

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

Columbia Thermostat Fund  vs.  Hundredfold Select Alternative

Columbia Thermostat

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Thermostat Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Columbia Thermostat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hundredfold Select

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hundredfold Select Alternative are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hundredfold Select 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 Thermostat and Hundredfold Select

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

The idea behind Columbia Thermostat Fund and Hundredfold Select Alternative 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.