Correlation Between Amana Developing and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Amana Developing and Columbia Emerging 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 Amana Developing and Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Developing World and Columbia Emerging Markets, you can compare the effects of market volatilities on Amana Developing and Columbia Emerging 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 Amana Developing with a short position of Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Columbia Emerging.
Diversification Opportunities for Amana Developing and Columbia Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amana and Columbia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets and Amana Developing 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 Amana Developing World are associated (or correlated) with Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Amana Developing i.e., Amana Developing and Columbia Emerging go up and down completely randomly.
Pair Corralation between Amana Developing and Columbia Emerging
Assuming the 90 days horizon Amana Developing World is expected to generate 0.64 times more return on investment than Columbia Emerging. However, Amana Developing World is 1.56 times less risky than Columbia Emerging. It trades about 0.03 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.01 per unit of risk. If you would invest 1,140 in Amana Developing World on January 26, 2024 and sell it today you would earn a total of 109.00 from holding Amana Developing World or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amana Developing World vs. Columbia Emerging Markets
Performance |
| Timeline |
| Amana Developing World |
| Columbia Emerging Markets |
Amana Developing and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Developing and Columbia Emerging
The main advantage of trading using opposite Amana Developing and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, Columbia Emerging 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 Emerging will offset losses from the drop in Columbia Emerging's long position.| Amana Developing vs. Amana Income Fund | Amana Developing vs. Amana Growth Fund | Amana Developing vs. Amana Participation Fund | Amana Developing vs. HUMANA INC |
| Columbia Emerging vs. Amana Income Fund | Columbia Emerging vs. Amana Growth Fund | Columbia Emerging vs. Amana Participation Fund | Columbia Emerging vs. HUMANA INC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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