Correlation Between Columbia Small and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Columbia Small and Nasdaq 100 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 Small and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Small Cap and Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Columbia Small and Nasdaq 100 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 Small with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Small and Nasdaq 100.
Diversification Opportunities for Columbia Small and Nasdaq 100
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Nasdaq is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Small Cap and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index and Columbia Small 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 Small Cap are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Columbia Small i.e., Columbia Small and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Columbia Small and Nasdaq 100
Assuming the 90 days horizon Columbia Small is expected to generate 1.59 times less return on investment than Nasdaq 100. In addition to that, Columbia Small is 1.19 times more volatile than Nasdaq 100 Index Fund. It trades about 0.1 of its total potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.18 per unit of volatility. If you would invest 4,879 in Nasdaq 100 Index Fund on September 14, 2024 and sell it today you would earn a total of 557.00 from holding Nasdaq 100 Index Fund or generate 11.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Columbia Small Cap vs. Nasdaq 100 Index Fund
Performance |
Timeline |
Columbia Small Cap |
Nasdaq 100 Index |
Columbia Small and Nasdaq 100 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Columbia Small and Nasdaq 100
The main advantage of trading using opposite Columbia Small and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Small position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.Columbia Small vs. Nasdaq 100 Index Fund | Columbia Small vs. L Abbett Fundamental | Columbia Small vs. Rbb Fund | Columbia Small vs. Auer Growth Fund |
Nasdaq 100 vs. Qs Large Cap | Nasdaq 100 vs. Lord Abbett Affiliated | Nasdaq 100 vs. Dunham Large Cap | Nasdaq 100 vs. Dodge Cox Stock |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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