Correlation Between Columbia Emerging and Columbia Large

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

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

Diversification Opportunities for Columbia Emerging and Columbia Large

0.97

Correlation Coefficient

Columbia Emerging  Columbia Large

Almost no diversification

The 3 months correlation between Columbia and Columbia is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Emerging Markets and Columbia Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Large Cap and Columbia Emerging 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 Emerging Markets are associated (or correlated) with Columbia Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Large Cap has no effect on the direction of Columbia Emerging i.e., Columbia Emerging and Columbia Large go up and down completely randomly.

Pair Corralation between Columbia Emerging and Columbia Large

Assuming the 90 days horizon Columbia Emerging is expected to generate 1.5 times less return on investment than Columbia Large. But when comparing it to its historical volatility, Columbia Emerging Markets is 1.02 times less risky than Columbia Large. It trades about 0.15 of its potential returns per unit of risk. Columbia Large Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,518  in Columbia Large Cap on May 6, 2025 and sell it today you would earn a total of  288.00  from holding Columbia Large Cap or generate 11.44% return on investment over 90 days.

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

Columbia Emerging Markets  vs.  Columbia Large Cap

Columbia Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Emerging Markets are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Columbia Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Columbia Emerging and Columbia Large

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

The idea behind Columbia Emerging Markets and Columbia Large 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.