Correlation Between Columbia Seligman and Aberdeen Select
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman and Aberdeen Select 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 Aberdeen Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Seligman Premium and Aberdeen Select International, you can compare the effects of market volatilities on Columbia Seligman and Aberdeen Select 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 Aberdeen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Aberdeen Select.
Diversification Opportunities for Columbia Seligman and Aberdeen Select
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Aberdeen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Premium and Aberdeen Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Select Inte 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 Premium are associated (or correlated) with Aberdeen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Select Inte has no effect on the direction of Columbia Seligman i.e., Columbia Seligman and Aberdeen Select go up and down completely randomly.
Pair Corralation between Columbia Seligman and Aberdeen Select
Considering the 90-day investment horizon Columbia Seligman is expected to generate 1.77 times less return on investment than Aberdeen Select. In addition to that, Columbia Seligman is 1.21 times more volatile than Aberdeen Select International. It trades about 0.04 of its total potential returns per unit of risk. Aberdeen Select International is currently generating about 0.09 per unit of volatility. If you would invest 2,876 in Aberdeen Select International on July 5, 2024 and sell it today you would earn a total of 331.00 from holding Aberdeen Select International or generate 11.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Columbia Seligman Premium vs. Aberdeen Select International
Performance |
Timeline |
Columbia Seligman Premium |
Aberdeen Select Inte |
Columbia Seligman and Aberdeen Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Columbia Seligman and Aberdeen Select
The main advantage of trading using opposite Columbia Seligman and Aberdeen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman position performs unexpectedly, Aberdeen Select 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 Aberdeen Select will offset losses from the drop in Aberdeen Select's long position.Columbia Seligman vs. Eaton Vance Enhanced | Columbia Seligman vs. BlackRock Utility Infrastructure | Columbia Seligman vs. BlackRock Health Sciences | Columbia Seligman vs. BlackRock Science Tech |
Aberdeen Select vs. William Blair International | Aberdeen Select vs. Artisan International Fund | Aberdeen Select vs. Royce Premier Fund | Aberdeen Select vs. The Jensen Portfolio |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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