Correlation Between Columbia Seligman and Columbia Integrated

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

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

Diversification Opportunities for Columbia Seligman and Columbia Integrated

-0.69

Correlation Coefficient

Columbia Seligman  Columbia Integrated

Excellent diversification

The 3 months correlation between Columbia and Columbia is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Munications and Columbia Integrated Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Integrated Small and Columbia Seligman 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 Seligman Munications are associated (or correlated) with Columbia Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Integrated Small has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Columbia Integrated go up and down completely randomly.

Pair Corralation between Columbia Seligman and Columbia Integrated

Assuming the 90 days horizon Columbia Seligman Munications is expected to under-perform the Columbia Integrated. In addition to that, Columbia Seligman is 1.95 times more volatile than Columbia Integrated Small. It trades about -0.04 of its total potential returns per unit of risk. Columbia Integrated Small is currently generating about 0.15 per unit of volatility. If you would invest  1,431  in Columbia Integrated Small on September 30, 2024 and sell it today you would earn a total of  337.00  from holding Columbia Integrated Small or generate 23.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.54%
Values	Daily Returns

Columbia Seligman Munications  vs.  Columbia Integrated Small

Columbia Seligman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Seligman Munications 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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Columbia Integrated Small

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Columbia Integrated Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak essential indicators, Columbia Integrated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Columbia Seligman and Columbia Integrated

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

The idea behind Columbia Seligman Munications and Columbia Integrated Small 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.