Correlation Between Columbia Sustainable and IShares MSCI

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

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

Diversification Opportunities for Columbia Sustainable and IShares MSCI

-0.25

Correlation Coefficient

Columbia Sustainable  IShares MSCI

Very good diversification

The 3 months correlation between Columbia and IShares is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sustainable Equity and iShares MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI ACWI and Columbia Sustainable 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 Sustainable Equity are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI ACWI has no effect on the direction of Columbia Sustainable i.e., Columbia Sustainable and IShares MSCI go up and down completely randomly.

Pair Corralation between Columbia Sustainable and IShares MSCI

If you would invest  19,794  in iShares MSCI ACWI on October 26, 2024 and sell it today you would earn a total of  239.00  from holding iShares MSCI ACWI or generate 1.21% return on investment over 90 days.

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

Columbia Sustainable Equity  vs.  iShares MSCI ACWI

Columbia Sustainable

Risk-Adjusted Performance

0 of 100

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.

iShares MSCI ACWI

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI ACWI are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares MSCI is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Columbia Sustainable and IShares MSCI

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

The idea behind Columbia Sustainable Equity and iShares MSCI ACWI 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.