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 Equity, 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

0.0

Correlation Coefficient

Xtrackers FTSE  Columbia Sustainable

Pay attention - limited upside

The 3 months correlation between Xtrackers and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers FTSE Developed and Columbia Sustainable Equity 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  2,827  in Xtrackers FTSE Developed on December 22, 2024 and sell it today you would earn a total of  216.00  from holding Xtrackers FTSE Developed or generate 7.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xtrackers FTSE Developed  vs.  Columbia Sustainable Equity

Xtrackers FTSE Developed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers FTSE Developed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Xtrackers FTSE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Columbia Sustainable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Sustainable Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Columbia Sustainable is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private 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 Equity 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..