Correlation Between Columbia Sustainable and First Trust

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

By analyzing existing cross correlation between Columbia Sustainable Equity and First Trust Structured, you can compare the effects of market volatilities on Columbia Sustainable and First Trust 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 Sustainable with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sustainable and First Trust.

Diversification Opportunities for Columbia Sustainable and First Trust

0.56

Correlation Coefficient

Columbia Sustainable  First Trust

Very weak diversification

The 3 months correlation between Columbia and First is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sustainable Equity and First Trust Structured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Structured and Columbia Sustainable 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 Sustainable Equity are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Structured has no effect on the direction of Columbia Sustainable i.e., Columbia Sustainable and First Trust go up and down completely randomly.

Pair Corralation between Columbia Sustainable and First Trust

Given the investment horizon of 90 days Columbia Sustainable Equity is expected to generate 1.77 times more return on investment than First Trust. However, Columbia Sustainable is 1.77 times more volatile than First Trust Structured. It trades about 0.07 of its potential returns per unit of risk. First Trust Structured is currently generating about 0.12 per unit of risk. If you would invest  4,536  in Columbia Sustainable Equity on July 6, 2025 and sell it today you would earn a total of  113.00  from holding Columbia Sustainable Equity or generate 2.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Columbia Sustainable Equity  vs.  First Trust Structured

Columbia Sustainable

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Sustainable Equity are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Columbia Sustainable is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

First Trust Structured

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Structured are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, First Trust is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Columbia Sustainable and First Trust

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

The idea behind Columbia Sustainable Equity and First Trust Structured 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.