Correlation Between Columbia Short and Arbitrage Event

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

By analyzing existing cross correlation between Columbia Short Term and The Arbitrage Event Driven, you can compare the effects of market volatilities on Columbia Short and Arbitrage Event 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 Short with a short position of Arbitrage Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Short and Arbitrage Event.

Diversification Opportunities for Columbia Short and Arbitrage Event

0.94

Correlation Coefficient

Columbia Short  Arbitrage Event

Almost no diversification

The 3 months correlation between Columbia and Arbitrage is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Short Term and The Arbitrage Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Event and Columbia Short 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 Short Term are associated (or correlated) with Arbitrage Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Event has no effect on the direction of Columbia Short i.e., Columbia Short and Arbitrage Event go up and down completely randomly.

Pair Corralation between Columbia Short and Arbitrage Event

Assuming the 90 days horizon Columbia Short is expected to generate 1.34 times less return on investment than Arbitrage Event. In addition to that, Columbia Short is 1.13 times more volatile than The Arbitrage Event Driven. It trades about 0.25 of its total potential returns per unit of risk. The Arbitrage Event Driven is currently generating about 0.37 per unit of volatility. If you would invest  1,204  in The Arbitrage Event Driven on May 12, 2025 and sell it today you would earn a total of  32.00  from holding The Arbitrage Event Driven or generate 2.66% return on investment over 90 days.

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

Columbia Short Term  vs.  The Arbitrage Event Driven

Columbia Short Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Short Term are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Columbia Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Arbitrage Event

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Arbitrage Event Driven are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Arbitrage Event 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 Short and Arbitrage Event

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

The idea behind Columbia Short Term and The Arbitrage Event Driven 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.