Correlation Between Columbia Integrated and Columbia Amt-free

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

By analyzing existing cross correlation between Columbia Integrated Large and Columbia Amt Free Intermediate, you can compare the effects of market volatilities on Columbia Integrated and Columbia Amt-free 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 Integrated with a short position of Columbia Amt-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Integrated and Columbia Amt-free.

Diversification Opportunities for Columbia Integrated and Columbia Amt-free

0.53

Correlation Coefficient

Columbia Integrated  Columbia Amt-free

Very weak diversification

The 3 months correlation between Columbia and Columbia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Integrated Large and Columbia Amt Free Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Amt Free and Columbia Integrated 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 Integrated Large are associated (or correlated) with Columbia Amt-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Amt Free has no effect on the direction of Columbia Integrated i.e., Columbia Integrated and Columbia Amt-free go up and down completely randomly.

Pair Corralation between Columbia Integrated and Columbia Amt-free

Assuming the 90 days horizon Columbia Integrated Large is expected to under-perform the Columbia Amt-free. In addition to that, Columbia Integrated is 10.22 times more volatile than Columbia Amt Free Intermediate. It trades about -0.14 of its total potential returns per unit of risk. Columbia Amt Free Intermediate is currently generating about 0.01 per unit of volatility. If you would invest  954.00  in Columbia Amt Free Intermediate on December 1, 2024 and sell it today you would earn a total of  1.00  from holding Columbia Amt Free Intermediate or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Columbia Integrated Large  vs.  Columbia Amt Free Intermediate

Columbia Integrated Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Integrated Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Columbia Amt Free

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Columbia Integrated and Columbia Amt-free

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

The idea behind Columbia Integrated Large and Columbia Amt Free Intermediate 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.