Correlation Between Columbia Balanced and Guidepath(r) Conservative

Can any of the company-specific risk be diversified away by investing in both Columbia Balanced and Guidepath(r) Conservative 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 Balanced and Guidepath(r) Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Balanced Fund and Guidepath Servative Allocation, you can compare the effects of market volatilities on Columbia Balanced and Guidepath(r) Conservative 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 Balanced with a short position of Guidepath(r) Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Balanced and Guidepath(r) Conservative.

Diversification Opportunities for Columbia Balanced and Guidepath(r) Conservative

0.99

Correlation Coefficient

Columbia Balanced  Guidepath(r) Conservative

No risk reduction

The 3 months correlation between Columbia and Guidepath(r) is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Balanced Fund and Guidepath Servative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath(r) Conservative and Columbia Balanced 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 Balanced Fund are associated (or correlated) with Guidepath(r) Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath(r) Conservative has no effect on the direction of Columbia Balanced i.e., Columbia Balanced and Guidepath(r) Conservative go up and down completely randomly.

Pair Corralation between Columbia Balanced and Guidepath(r) Conservative

Assuming the 90 days horizon Columbia Balanced Fund is expected to generate 1.36 times more return on investment than Guidepath(r) Conservative. However, Columbia Balanced is 1.36 times more volatile than Guidepath Servative Allocation. It trades about 0.32 of its potential returns per unit of risk. Guidepath Servative Allocation is currently generating about 0.27 per unit of risk. If you would invest  5,130  in Columbia Balanced Fund on May 21, 2025 and sell it today you would earn a total of  433.00  from holding Columbia Balanced Fund or generate 8.44% return on investment over 90 days.

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

Columbia Balanced Fund  vs.  Guidepath Servative Allocation

Columbia Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Balanced Fund are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Balanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Guidepath(r) Conservative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Servative Allocation are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Guidepath(r) Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Columbia Balanced and Guidepath(r) Conservative

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

The idea behind Columbia Balanced Fund and Guidepath Servative Allocation 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.