Correlation Between Columbia Convertible and Hundredfold Select

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

By analyzing existing cross correlation between Columbia Convertible Securities and Hundredfold Select Alternative, you can compare the effects of market volatilities on Columbia Convertible and Hundredfold Select 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 Convertible with a short position of Hundredfold Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Hundredfold Select.

Diversification Opportunities for Columbia Convertible and Hundredfold Select

0.65

Correlation Coefficient

Columbia Convertible  Hundredfold Select

Poor diversification

The 3 months correlation between Columbia and Hundredfold is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Convertible Securitie and Hundredfold Select Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hundredfold Select and Columbia Convertible 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 Convertible Securities are associated (or correlated) with Hundredfold Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hundredfold Select has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Hundredfold Select go up and down completely randomly.

Pair Corralation between Columbia Convertible and Hundredfold Select

Assuming the 90 days horizon Columbia Convertible Securities is expected to generate 1.39 times more return on investment than Hundredfold Select. However, Columbia Convertible is 1.39 times more volatile than Hundredfold Select Alternative. It trades about 0.13 of its potential returns per unit of risk. Hundredfold Select Alternative is currently generating about 0.03 per unit of risk. If you would invest  2,118  in Columbia Convertible Securities on October 11, 2024 and sell it today you would earn a total of  109.00  from holding Columbia Convertible Securities or generate 5.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	13.33%
Values	Daily Returns

Columbia Convertible Securitie  vs.  Hundredfold Select Alternative

Columbia Convertible

Risk-Adjusted Performance

8 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Convertible Securities are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Columbia Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hundredfold Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hundredfold Select Alternative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hundredfold Select 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 Convertible and Hundredfold Select

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

The idea behind Columbia Convertible Securities and Hundredfold Select Alternative 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.