Correlation Between Columbia and Columbia Commodity
Can any of the company-specific risk be diversified away by investing in both Columbia and Columbia Commodity 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 and Columbia Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Treasury Index and Columbia Modity Strategy, you can compare the effects of market volatilities on Columbia and Columbia Commodity 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 with a short position of Columbia Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia and Columbia Commodity.
Diversification Opportunities for Columbia and Columbia Commodity
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and Columbia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Treasury Index and Columbia Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Modity Strategy and Columbia 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 Treasury Index are associated (or correlated) with Columbia Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Modity Strategy has no effect on the direction of Columbia i.e., Columbia and Columbia Commodity go up and down completely randomly.
Pair Corralation between Columbia and Columbia Commodity
Assuming the 90 days horizon Columbia is expected to generate 10.99 times less return on investment than Columbia Commodity. But when comparing it to its historical volatility, Columbia Treasury Index is 2.55 times less risky than Columbia Commodity. It trades about 0.04 of its potential returns per unit of risk. Columbia Modity Strategy is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 923.00 in Columbia Modity Strategy on December 2, 2024 and sell it today you would earn a total of 75.00 from holding Columbia Modity Strategy or generate 8.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Columbia Treasury Index vs. Columbia Modity Strategy
Performance |
Timeline |
Columbia Treasury Index |
Columbia Modity Strategy |
Columbia and Columbia Commodity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Columbia and Columbia Commodity
The main advantage of trading using opposite Columbia and Columbia Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia position performs unexpectedly, Columbia Commodity 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 Columbia Commodity will offset losses from the drop in Columbia Commodity's long position.The idea behind Columbia Treasury Index and Columbia Modity Strategy 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.Columbia Commodity vs. Shelton Emerging Markets | Columbia Commodity vs. Intal High Relative | Columbia Commodity vs. Ft 7934 Corporate | Columbia Commodity vs. Victory Incore Fund |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |