Correlation Between Columbia Dividend and Virtus Global

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

By analyzing existing cross correlation between Columbia Dividend Opportunity and Virtus Global Infrastructure, you can compare the effects of market volatilities on Columbia Dividend and Virtus Global 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 Dividend with a short position of Virtus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Dividend and Virtus Global.

Diversification Opportunities for Columbia Dividend and Virtus Global

0.48

Correlation Coefficient

Columbia Dividend  Virtus Global

Very weak diversification

The 3 months correlation between Columbia and Virtus is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Dividend Opportunity and Virtus Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Infras and Columbia Dividend 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 Dividend Opportunity are associated (or correlated) with Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Infras has no effect on the direction of Columbia Dividend i.e., Columbia Dividend and Virtus Global go up and down completely randomly.

Pair Corralation between Columbia Dividend and Virtus Global

Assuming the 90 days horizon Columbia Dividend Opportunity is expected to generate 0.94 times more return on investment than Virtus Global. However, Columbia Dividend Opportunity is 1.06 times less risky than Virtus Global. It trades about 0.11 of its potential returns per unit of risk. Virtus Global Infrastructure is currently generating about 0.06 per unit of risk. If you would invest  4,009  in Columbia Dividend Opportunity on September 8, 2024 and sell it today you would earn a total of  116.00  from holding Columbia Dividend Opportunity or generate 2.89% return on investment over 90 days.

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

Columbia Dividend Opportunity  vs.  Virtus Global Infrastructure

Columbia Dividend

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Dividend Opportunity 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 Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Global Infras

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Global Infrastructure are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Virtus Global 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 Dividend and Virtus Global

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

The idea behind Columbia Dividend Opportunity and Virtus Global Infrastructure 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 Stocks Directory module to find actively traded stocks across global markets.