Correlation Between Columbia Seligman and Veea

Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Veea 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 Veea 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 Veea Inc, you can compare the effects of market volatilities on Columbia Seligman and Veea 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 Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Veea.

Diversification Opportunities for Columbia Seligman and Veea

-0.52

Correlation Coefficient

Columbia Seligman  Veea

Excellent diversification

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

Pair Corralation between Columbia Seligman and Veea

Assuming the 90 days horizon Columbia Seligman Munications is expected to generate 0.32 times more return on investment than Veea. However, Columbia Seligman Munications is 3.1 times less risky than Veea. It trades about 0.1 of its potential returns per unit of risk. Veea Inc is currently generating about -0.08 per unit of risk. If you would invest  4,748  in Columbia Seligman Munications on October 25, 2024 and sell it today you would earn a total of  110.00  from holding Columbia Seligman Munications or generate 2.32% return on investment over 90 days.

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

Columbia Seligman Munications  vs.  Veea Inc

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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Columbia Seligman and Veea

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

The idea behind Columbia Seligman Munications and Veea Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.