Correlation Between Multi Manager and Columbia Select
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Columbia 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 Multi Manager and Columbia Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager Directional Alternative and Columbia Select Large, you can compare the effects of market volatilities on Multi Manager and Columbia 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 Multi Manager with a short position of Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Columbia Select.
Diversification Opportunities for Multi Manager and Columbia Select
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Columbia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Directional Alte and Columbia Select Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Large and Multi Manager 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 Multi Manager Directional Alternative are associated (or correlated) with Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Large has no effect on the direction of Multi Manager i.e., Multi Manager and Columbia Select go up and down completely randomly.
Pair Corralation between Multi Manager and Columbia Select
Assuming the 90 days horizon Multi Manager Directional Alternative is expected to under-perform the Columbia Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Multi Manager Directional Alternative is 1.02 times less risky than Columbia Select. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Columbia Select Large is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Columbia Select Large on September 26, 2024 and sell it today you would lose (7.00) from holding Columbia Select Large or give up 0.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Multi Manager Directional Alte vs. Columbia Select Large
Performance |
Timeline |
Multi Manager Direct |
Columbia Select Large |
Multi Manager and Columbia Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Manager and Columbia Select
The main advantage of trading using opposite Multi Manager and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Columbia 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 Columbia Select will offset losses from the drop in Columbia Select's long position.Multi Manager vs. 361 Global Longshort | Multi Manager vs. Mirova Global Green | Multi Manager vs. Ab Global Risk | Multi Manager vs. Ab Global Risk |
Columbia Select vs. Columbia Porate Income | Columbia Select vs. Columbia Ultra Short | Columbia Select vs. Columbia Treasury Index | Columbia Select vs. Multi Manager Directional Alternative |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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