Correlation Between Columbia Disciplined and Acr Multi

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

By analyzing existing cross correlation between Columbia Disciplined Value and Acr Multi Strategy Quality, you can compare the effects of market volatilities on Columbia Disciplined and Acr Multi 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 Disciplined with a short position of Acr Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Disciplined and Acr Multi.

Diversification Opportunities for Columbia Disciplined and Acr Multi

-0.59

Correlation Coefficient

Columbia Disciplined  Acr Multi

Excellent diversification

The 3 months correlation between Columbia and Acr is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Disciplined Value and Acr Multi Strategy Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acr Multi Strategy and Columbia Disciplined 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 Disciplined Value are associated (or correlated) with Acr Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acr Multi Strategy has no effect on the direction of Columbia Disciplined i.e., Columbia Disciplined and Acr Multi go up and down completely randomly.

Pair Corralation between Columbia Disciplined and Acr Multi

Assuming the 90 days horizon Columbia Disciplined Value is expected to generate 0.89 times more return on investment than Acr Multi. However, Columbia Disciplined Value is 1.13 times less risky than Acr Multi. It trades about 0.08 of its potential returns per unit of risk. Acr Multi Strategy Quality is currently generating about 0.06 per unit of risk. If you would invest  761.00  in Columbia Disciplined Value on September 29, 2024 and sell it today you would earn a total of  253.00  from holding Columbia Disciplined Value or generate 33.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.57%
Values	Daily Returns

Columbia Disciplined Value  vs.  Acr Multi Strategy Quality

Columbia Disciplined

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Columbia Disciplined Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak technical and fundamental indicators, Columbia Disciplined may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Acr Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acr Multi Strategy Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Columbia Disciplined and Acr Multi

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

The idea behind Columbia Disciplined Value and Acr Multi Strategy Quality 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.