Correlation Between IShares Russell and Columbia

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

By analyzing existing cross correlation between iShares Russell 1000 and Columbia, you can compare the effects of market volatilities on IShares Russell and Columbia 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 IShares Russell with a short position of Columbia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Columbia.

Diversification Opportunities for IShares Russell and Columbia

0.0

Correlation Coefficient

IShares Russell  Columbia

Pay attention - limited upside

The 3 months correlation between IShares and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and Columbia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia and IShares Russell 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 iShares Russell 1000 are associated (or correlated) with Columbia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia has no effect on the direction of IShares Russell i.e., IShares Russell and Columbia go up and down completely randomly.

Pair Corralation between IShares Russell and Columbia

If you would invest (100.00) in Columbia on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Columbia or generate -100.0% return on investment over 90 days.

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

iShares Russell 1000  vs.  Columbia

iShares Russell 1000

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Russell 1000 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, IShares Russell may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Columbia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IShares Russell and Columbia

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

The idea behind iShares Russell 1000 and Columbia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.