Correlation Between CKX Lands and Columbia ETF

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

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

Diversification Opportunities for CKX Lands and Columbia ETF

0.12

Correlation Coefficient

CKX Lands  Columbia ETF

Average diversification

The 3 months correlation between CKX and Columbia is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CKX Lands and Columbia ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia ETF Trust and CKX Lands 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 CKX Lands are associated (or correlated) with Columbia ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia ETF Trust has no effect on the direction of CKX Lands i.e., CKX Lands and Columbia ETF go up and down completely randomly.

Pair Corralation between CKX Lands and Columbia ETF

Considering the 90-day investment horizon CKX Lands is expected to under-perform the Columbia ETF. In addition to that, CKX Lands is 2.73 times more volatile than Columbia ETF Trust. It trades about -0.08 of its total potential returns per unit of risk. Columbia ETF Trust is currently generating about -0.01 per unit of volatility. If you would invest  2,341  in Columbia ETF Trust on September 12, 2024 and sell it today you would lose (6.00) from holding Columbia ETF Trust or give up 0.26% of portfolio value over 90 days.

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

CKX Lands  vs.  Columbia ETF Trust

CKX Lands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, CKX Lands is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Columbia ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CKX Lands and Columbia ETF

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

The idea behind CKX Lands and Columbia ETF Trust 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..