Correlation Between Columbia Seligman and Columbia Global

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

Diversification Opportunities for Columbia Seligman and Columbia Global

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Columbia and Columbia is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SELIGMAN MUNICATIONS and COLUMBIA GLOBAL TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Tech 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Tech has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Columbia Global go up and down completely randomly.

Pair Corralation between Columbia Seligman and Columbia Global

Assuming the 90 days horizon Columbia Seligman Munications is expected to generate 0.97 times more return on investment than Columbia Global. However, Columbia Seligman Munications is 1.03 times less risky than Columbia Global. It trades about 0.18 of its potential returns per unit of risk. Columbia Global Technology is currently generating about 0.11 per unit of risk. If you would invest  13,667  in Columbia Seligman Munications on December 29, 2023 and sell it today you would earn a total of  618.00  from holding Columbia Seligman Munications or generate 4.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.65%
ValuesDaily Returns

COLUMBIA SELIGMAN MUNICATIONS  vs.  COLUMBIA GLOBAL TECHNOLOGY

 Performance 
       Timeline  
Columbia Seligman 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Seligman Munications are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady forward indicators, Columbia Seligman may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Columbia Global Tech 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Global Technology are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Columbia Global showed solid returns over the last few months and may actually be approaching a breakup point.

Columbia Seligman and Columbia Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Columbia Seligman and Columbia Global

The main advantage of trading using opposite Columbia Seligman and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Columbia 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 Columbia Global will offset losses from the drop in Columbia Global's long position.
The idea behind Columbia Seligman Munications and Columbia Global Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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