Correlation Between Columbia Seligman and Electronics Fund
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Electronics Fund 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 Electronics Fund 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 Electronics Fund Class, you can compare the effects of market volatilities on Columbia Seligman and Electronics Fund 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 Electronics Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Electronics Fund.
Diversification Opportunities for Columbia Seligman and Electronics Fund
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Electronics is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Munications and Electronics Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Fund Class 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 Electronics Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Fund Class has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Electronics Fund go up and down completely randomly.
Pair Corralation between Columbia Seligman and Electronics Fund
Assuming the 90 days horizon Columbia Seligman Munications is expected to generate 0.65 times more return on investment than Electronics Fund. However, Columbia Seligman Munications is 1.53 times less risky than Electronics Fund. It trades about -0.09 of its potential returns per unit of risk. Electronics Fund Class is currently generating about -0.08 per unit of risk. If you would invest 5,393 in Columbia Seligman Munications on January 31, 2024 and sell it today you would lose (137.00) from holding Columbia Seligman Munications or give up 2.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Columbia Seligman Munications vs. Electronics Fund Class
Performance |
Timeline |
Columbia Seligman |
Electronics Fund Class |
Columbia Seligman and Electronics Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Columbia Seligman and Electronics Fund
The main advantage of trading using opposite Columbia Seligman and Electronics Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Electronics Fund 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 Electronics Fund will offset losses from the drop in Electronics Fund's long position.Columbia Seligman vs. Columbia Global Technology | Columbia Seligman vs. Blackrock Science Technology | Columbia Seligman vs. Columbia Global Technology | Columbia Seligman vs. Columbia Global Technology |
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Check out your portfolio center.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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