Correlation Between Xtrackers FTSE and Columbia Sustainable

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

By analyzing existing cross correlation between Xtrackers FTSE Developed and Columbia Sustainable International, you can compare the effects of market volatilities on Xtrackers FTSE and Columbia Sustainable 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 Xtrackers FTSE with a short position of Columbia Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers FTSE and Columbia Sustainable.

Diversification Opportunities for Xtrackers FTSE and Columbia Sustainable

-0.42

Correlation Coefficient

Xtrackers FTSE  Columbia Sustainable

Very good diversification

The 3 months correlation between Xtrackers and Columbia is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers FTSE Developed and Columbia Sustainable Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sustainable and Xtrackers FTSE 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 Xtrackers FTSE Developed are associated (or correlated) with Columbia Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sustainable has no effect on the direction of Xtrackers FTSE i.e., Xtrackers FTSE and Columbia Sustainable go up and down completely randomly.

Pair Corralation between Xtrackers FTSE and Columbia Sustainable

If you would invest  2,830  in Xtrackers FTSE Developed on October 25, 2024 and sell it today you would earn a total of  42.00  from holding Xtrackers FTSE Developed or generate 1.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

Xtrackers FTSE Developed  vs.  Columbia Sustainable Internati

Xtrackers FTSE Developed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers FTSE Developed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Xtrackers FTSE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Columbia Sustainable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Sustainable International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Columbia Sustainable is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Xtrackers FTSE and Columbia Sustainable

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

The idea behind Xtrackers FTSE Developed and Columbia Sustainable International 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.