Correlation Between Columbia Minnesota and Wasatch E

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

By analyzing existing cross correlation between Columbia Minnesota Tax Exempt and Wasatch E Growth, you can compare the effects of market volatilities on Columbia Minnesota and Wasatch E 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 Minnesota with a short position of Wasatch E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Minnesota and Wasatch E.

Diversification Opportunities for Columbia Minnesota and Wasatch E

-0.08

Correlation Coefficient

Columbia Minnesota  Wasatch E

Good diversification

The 3 months correlation between Columbia and Wasatch is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Minnesota Tax Exempt and Wasatch E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch E Growth and Columbia Minnesota 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 Minnesota Tax Exempt are associated (or correlated) with Wasatch E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch E Growth has no effect on the direction of Columbia Minnesota i.e., Columbia Minnesota and Wasatch E go up and down completely randomly.

Pair Corralation between Columbia Minnesota and Wasatch E

Assuming the 90 days horizon Columbia Minnesota is expected to generate 79.27 times less return on investment than Wasatch E. But when comparing it to its historical volatility, Columbia Minnesota Tax Exempt is 5.63 times less risky than Wasatch E. It trades about 0.01 of its potential returns per unit of risk. Wasatch E Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  8,218  in Wasatch E Growth on May 6, 2025 and sell it today you would earn a total of  417.00  from holding Wasatch E Growth or generate 5.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Columbia Minnesota Tax Exempt  vs.  Wasatch E Growth

Columbia Minnesota Tax

Risk-Adjusted Performance

Very Weak

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

Wasatch E Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch E Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wasatch E 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 Minnesota and Wasatch E

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

The idea behind Columbia Minnesota Tax Exempt and Wasatch E Growth 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.