Correlation Between Upright Assets and Columbia Acorn

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

By analyzing existing cross correlation between Upright Assets Allocation and Columbia Acorn Fund, you can compare the effects of market volatilities on Upright Assets and Columbia Acorn 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 Upright Assets with a short position of Columbia Acorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upright Assets and Columbia Acorn.

Diversification Opportunities for Upright Assets and Columbia Acorn

0.75

Correlation Coefficient

Upright Assets  Columbia Acorn

Poor diversification

The 3 months correlation between Upright and Columbia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Upright Assets Allocation and Columbia Acorn Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Acorn and Upright Assets 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 Upright Assets Allocation are associated (or correlated) with Columbia Acorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Acorn has no effect on the direction of Upright Assets i.e., Upright Assets and Columbia Acorn go up and down completely randomly.

Pair Corralation between Upright Assets and Columbia Acorn

Assuming the 90 days horizon Upright Assets is expected to generate 4.14 times less return on investment than Columbia Acorn. In addition to that, Upright Assets is 2.12 times more volatile than Columbia Acorn Fund. It trades about 0.08 of its total potential returns per unit of risk. Columbia Acorn Fund is currently generating about 0.71 per unit of volatility. If you would invest  1,386  in Columbia Acorn Fund on September 21, 2024 and sell it today you would earn a total of  48.00  from holding Columbia Acorn Fund or generate 3.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	23.81%
Values	Daily Returns

Upright Assets Allocation  vs.  Columbia Acorn Fund

Upright Assets Allocation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Assets Allocation are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Upright Assets may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Columbia Acorn

Risk-Adjusted Performance

0 of 100

Good

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Upright Assets and Columbia Acorn

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

The idea behind Upright Assets Allocation and Columbia Acorn Fund 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.