Correlation Between Multi Manager and Columbia Select

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

By analyzing existing cross correlation between Multi Manager Directional Alternative and Columbia Select Smaller Cap, you can compare the effects of market volatilities on Multi Manager and Columbia Select 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 Multi Manager with a short position of Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Columbia Select.

Diversification Opportunities for Multi Manager and Columbia Select

0.0

Correlation Coefficient

Multi Manager  Columbia Select

Pay attention - limited upside

The 3 months correlation between Multi and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Directional Alte and Columbia Select Smaller Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Smaller and Multi Manager 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 Multi Manager Directional Alternative are associated (or correlated) with Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Smaller has no effect on the direction of Multi Manager i.e., Multi Manager and Columbia Select go up and down completely randomly.

Pair Corralation between Multi Manager and Columbia Select

If you would invest  693.00  in Multi Manager Directional Alternative on February 4, 2024 and sell it today you would earn a total of  23.00  from holding Multi Manager Directional Alternative or generate 3.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Multi Manager Directional Alte  vs.  Columbia Select Smaller Cap

Multi Manager Direct

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Manager Directional Alternative are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Multi Manager is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Select Smaller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Select Smaller Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Columbia Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Multi Manager and Columbia Select

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

The idea behind Multi Manager Directional Alternative and Columbia Select Smaller Cap 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.