Correlation Between Columbia Small and Siit Ultra

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

By analyzing existing cross correlation between Columbia Small Cap and Siit Ultra Short, you can compare the effects of market volatilities on Columbia Small and Siit Ultra 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 Small with a short position of Siit Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Small and Siit Ultra.

Diversification Opportunities for Columbia Small and Siit Ultra

0.7

Correlation Coefficient

Columbia Small  Siit Ultra

Poor diversification

The 3 months correlation between Columbia and Siit is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Small Cap and Siit Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Ultra Short and Columbia Small 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 Small Cap are associated (or correlated) with Siit Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Ultra Short has no effect on the direction of Columbia Small i.e., Columbia Small and Siit Ultra go up and down completely randomly.

Pair Corralation between Columbia Small and Siit Ultra

If you would invest  996.00  in Siit Ultra Short on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Siit Ultra Short or generate 0.0% return on investment over 90 days.

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

Columbia Small Cap  vs.  Siit Ultra Short

Columbia Small Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Small may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Siit Ultra Short

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Ultra Short are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Ultra 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 Small and Siit Ultra

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

The idea behind Columbia Small Cap and Siit Ultra Short 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.