Correlation Between Fisher Small and Columbia Short

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

By analyzing existing cross correlation between Fisher Small Cap and Columbia Short Term, you can compare the effects of market volatilities on Fisher Small and Columbia Short 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 Fisher Small with a short position of Columbia Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Small and Columbia Short.

Diversification Opportunities for Fisher Small and Columbia Short

-0.52

Correlation Coefficient

Fisher Small  Columbia Short

Excellent diversification

The 3 months correlation between Fisher and COLUMBIA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Columbia Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Short Term and Fisher Small 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 Fisher Small Cap are associated (or correlated) with Columbia Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Short Term has no effect on the direction of Fisher Small i.e., Fisher Small and Columbia Short go up and down completely randomly.

Pair Corralation between Fisher Small and Columbia Short

Assuming the 90 days horizon Fisher Small Cap is expected to under-perform the Columbia Short. In addition to that, Fisher Small is 14.7 times more volatile than Columbia Short Term. It trades about -0.42 of its total potential returns per unit of risk. Columbia Short Term is currently generating about 0.14 per unit of volatility. If you would invest  980.00  in Columbia Short Term on December 2, 2024 and sell it today you would earn a total of  2.00  from holding Columbia Short Term or generate 0.2% return on investment over 90 days.

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

Fisher Small Cap  vs.  Columbia Short Term

Fisher Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fisher Small Cap 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 fundamental 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 Short Term

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Short Term are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Columbia Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fisher Small and Columbia Short

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

The idea behind Fisher Small Cap and Columbia Short Term 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.