Correlation Between Intal High and Columbia Seligman

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

By analyzing existing cross correlation between Intal High Relative and Columbia Seligman Global, you can compare the effects of market volatilities on Intal High and Columbia Seligman 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 Intal High with a short position of Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intal High and Columbia Seligman.

Diversification Opportunities for Intal High and Columbia Seligman

-0.48

Correlation Coefficient

Intal High  Columbia Seligman

Very good diversification

The 3 months correlation between Intal and Columbia is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intal High Relative and Columbia Seligman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Global and Intal High 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 Intal High Relative are associated (or correlated) with Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Global has no effect on the direction of Intal High i.e., Intal High and Columbia Seligman go up and down completely randomly.

Pair Corralation between Intal High and Columbia Seligman

Assuming the 90 days horizon Intal High Relative is expected to under-perform the Columbia Seligman. But the mutual fund apears to be less risky and, when comparing its historical volatility, Intal High Relative is 2.48 times less risky than Columbia Seligman. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Columbia Seligman Global is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  7,670  in Columbia Seligman Global on September 12, 2024 and sell it today you would lose (32.00) from holding Columbia Seligman Global or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intal High Relative  vs.  Columbia Seligman Global

Intal High Relative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Columbia Seligman Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Intal High and Columbia Seligman

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

The idea behind Intal High Relative and Columbia Seligman Global 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.