Correlation Between Columbia Seligman and American Mutual

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

By analyzing existing cross correlation between Columbia Seligman Global and American Mutual Fund, you can compare the effects of market volatilities on Columbia Seligman and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and American Mutual.

Diversification Opportunities for Columbia Seligman and American Mutual

0.98

Correlation Coefficient

Columbia Seligman  American Mutual

Almost no diversification

The 3 months correlation between Columbia and American is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Global and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 Global are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and American Mutual go up and down completely randomly.

Pair Corralation between Columbia Seligman and American Mutual

Assuming the 90 days horizon Columbia Seligman Global is expected to generate 1.95 times more return on investment than American Mutual. However, Columbia Seligman is 1.95 times more volatile than American Mutual Fund. It trades about 0.28 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.24 per unit of risk. If you would invest  6,707  in Columbia Seligman Global on May 4, 2025 and sell it today you would earn a total of  1,464  from holding Columbia Seligman Global or generate 21.83% return on investment over 90 days.

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

Columbia Seligman Global  vs.  American Mutual Fund

Columbia Seligman Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Seligman Global are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Seligman showed solid returns over the last few months and may actually be approaching a breakup point.

American Mutual

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Mutual Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, American Mutual may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Columbia Seligman and American Mutual

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

The idea behind Columbia Seligman Global and American Mutual Fund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..