Correlation Between Columbia Acorn and Columbia Emerging

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Columbia Acorn and Columbia Emerging 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 Acorn and Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Acorn Fund and Columbia Emerging Markets, you can compare the effects of market volatilities on Columbia Acorn and Columbia Emerging 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 Acorn with a short position of Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Acorn and Columbia Emerging.

Diversification Opportunities for Columbia Acorn and Columbia Emerging

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Columbia and Columbia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Acorn Fund and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets and Columbia Acorn 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 Acorn Fund are associated (or correlated) with Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Columbia Acorn i.e., Columbia Acorn and Columbia Emerging go up and down completely randomly.

Pair Corralation between Columbia Acorn and Columbia Emerging

Assuming the 90 days horizon Columbia Acorn Fund is expected to generate 3.98 times more return on investment than Columbia Emerging. However, Columbia Acorn is 3.98 times more volatile than Columbia Emerging Markets. It trades about 0.22 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest  1,247  in Columbia Acorn Fund on September 5, 2024 and sell it today you would earn a total of  187.00  from holding Columbia Acorn Fund or generate 15.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy92.19%
ValuesDaily Returns

Columbia Acorn Fund  vs.  Columbia Emerging Markets

 Performance 
       Timeline  
Columbia Acorn 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Columbia Acorn Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Columbia Acorn showed solid returns over the last few months and may actually be approaching a breakup point.
Columbia Emerging Markets 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Emerging Markets are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Columbia Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Acorn and Columbia Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Columbia Acorn and Columbia Emerging

The main advantage of trading using opposite Columbia Acorn and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Acorn position performs unexpectedly, Columbia Emerging 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 Emerging will offset losses from the drop in Columbia Emerging's long position.
The idea behind Columbia Acorn Fund and Columbia Emerging Markets 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

Other Complementary Tools

Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Fundamental Analysis
View fundamental data based on most recent published financial statements
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon