Correlation Between Columbia Real and Polen Smid

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

By analyzing existing cross correlation between Columbia Real Estate and Polen Smid, you can compare the effects of market volatilities on Columbia Real and Polen Smid 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 Real with a short position of Polen Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Real and Polen Smid.

Diversification Opportunities for Columbia Real and Polen Smid

0.1

Correlation Coefficient

Columbia Real  Polen Smid

Average diversification

The 3 months correlation between Columbia and Polen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Real Estate and Polen Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Smid and Columbia Real 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 Real Estate are associated (or correlated) with Polen Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Smid has no effect on the direction of Columbia Real i.e., Columbia Real and Polen Smid go up and down completely randomly.

Pair Corralation between Columbia Real and Polen Smid

Assuming the 90 days horizon Columbia Real Estate is expected to under-perform the Polen Smid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Columbia Real Estate is 1.32 times less risky than Polen Smid. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Polen Smid is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  777.00  in Polen Smid on September 16, 2024 and sell it today you would earn a total of  88.00  from holding Polen Smid or generate 11.33% return on investment over 90 days.

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

Columbia Real Estate  vs.  Polen Smid

Columbia Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Polen Smid

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Polen Smid are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Polen Smid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Columbia Real and Polen Smid

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

The idea behind Columbia Real Estate and Polen Smid 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.