Correlation Between Columbia Global and Pace Strategic

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

By analyzing existing cross correlation between Columbia Global Technology and Pace Strategic Fixed, you can compare the effects of market volatilities on Columbia Global and Pace Strategic 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 Global with a short position of Pace Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Global and Pace Strategic.

Diversification Opportunities for Columbia Global and Pace Strategic

-0.69

Correlation Coefficient

Columbia Global  Pace Strategic

Excellent diversification

The 3 months correlation between Columbia and Pace is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Global Technology and Pace Strategic Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Strategic Fixed and Columbia Global 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 Global Technology are associated (or correlated) with Pace Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Strategic Fixed has no effect on the direction of Columbia Global i.e., Columbia Global and Pace Strategic go up and down completely randomly.

Pair Corralation between Columbia Global and Pace Strategic

Assuming the 90 days horizon Columbia Global Technology is expected to generate 4.02 times more return on investment than Pace Strategic. However, Columbia Global is 4.02 times more volatile than Pace Strategic Fixed. It trades about 0.16 of its potential returns per unit of risk. Pace Strategic Fixed is currently generating about -0.08 per unit of risk. If you would invest  8,427  in Columbia Global Technology on September 12, 2024 and sell it today you would earn a total of  967.00  from holding Columbia Global Technology or generate 11.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Columbia Global Technology  vs.  Pace Strategic Fixed

Columbia Global Tech

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Global Technology are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Columbia Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pace Strategic Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pace Strategic Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pace Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Columbia Global and Pace Strategic

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

The idea behind Columbia Global Technology and Pace Strategic Fixed 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.