Correlation Between Columbia Seligman and Glg Intl

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

By analyzing existing cross correlation between Columbia Seligman Global and Glg Intl Small, you can compare the effects of market volatilities on Columbia Seligman and Glg Intl 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 Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Glg Intl.

Diversification Opportunities for Columbia Seligman and Glg Intl

0.86

Correlation Coefficient

Columbia Seligman  Glg Intl

Very poor diversification

The 3 months correlation between Columbia and Glg is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Global and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl 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 Global are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Glg Intl go up and down completely randomly.

Pair Corralation between Columbia Seligman and Glg Intl

Assuming the 90 days horizon Columbia Seligman Global is expected to generate 1.17 times more return on investment than Glg Intl. However, Columbia Seligman is 1.17 times more volatile than Glg Intl Small. It trades about 0.19 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.11 per unit of risk. If you would invest  6,790  in Columbia Seligman Global on September 3, 2024 and sell it today you would earn a total of  905.00  from holding Columbia Seligman Global or generate 13.33% return on investment over 90 days.

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

Columbia Seligman Global  vs.  Glg Intl Small

Columbia Seligman Global

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Seligman Global are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Seligman showed solid returns over the last few months and may actually be approaching a breakup point.

Glg Intl Small

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glg Intl Small are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Glg Intl may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Columbia Seligman and Glg Intl

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

The idea behind Columbia Seligman Global and Glg Intl 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.