Correlation Between Multi-manager Directional and Columbia Flexible
Can any of the company-specific risk be diversified away by investing in both Multi-manager Directional and Columbia Flexible 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 Multi-manager Directional and Columbia Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager Directional Alternative and Columbia Flexible Capital, you can compare the effects of market volatilities on Multi-manager Directional and Columbia Flexible 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 Multi-manager Directional with a short position of Columbia Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-manager Directional and Columbia Flexible.
Diversification Opportunities for Multi-manager Directional and Columbia Flexible
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi-manager and Columbia is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Directional Alte and Columbia Flexible Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Flexible Capital and Multi-manager Directional 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 Multi Manager Directional Alternative are associated (or correlated) with Columbia Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Flexible Capital has no effect on the direction of Multi-manager Directional i.e., Multi-manager Directional and Columbia Flexible go up and down completely randomly.
Pair Corralation between Multi-manager Directional and Columbia Flexible
Assuming the 90 days horizon Multi-manager Directional is expected to generate 1.84 times less return on investment than Columbia Flexible. In addition to that, Multi-manager Directional is 1.15 times more volatile than Columbia Flexible Capital. It trades about 0.14 of its total potential returns per unit of risk. Columbia Flexible Capital is currently generating about 0.3 per unit of volatility. If you would invest 1,365 in Columbia Flexible Capital on May 31, 2025 and sell it today you would earn a total of 98.00 from holding Columbia Flexible Capital or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager Directional Alte vs. Columbia Flexible Capital
Performance |
| Timeline |
| Multi-manager Directional |
| Columbia Flexible Capital |
Multi-manager Directional and Columbia Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-manager Directional and Columbia Flexible
The main advantage of trading using opposite Multi-manager Directional and Columbia Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-manager Directional position performs unexpectedly, Columbia Flexible 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 Flexible will offset losses from the drop in Columbia Flexible's long position.| Multi-manager Directional vs. Mesirow Financial High | Multi-manager Directional vs. T Rowe Price | Multi-manager Directional vs. Pace High Yield | Multi-manager Directional vs. Metropolitan West High |
| Columbia Flexible vs. Columbia Porate Income | Columbia Flexible vs. Columbia Ultra Short | Columbia Flexible vs. Columbia Treasury Index | Columbia Flexible vs. Multi Manager Directional Alternative |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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