Correlation Between Columbia Emerging and Columbia Treasury
Can any of the company-specific risk be diversified away by investing in both Columbia Emerging and Columbia Treasury 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 Emerging and Columbia Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Emerging Markets and Columbia Treasury Index, you can compare the effects of market volatilities on Columbia Emerging and Columbia Treasury 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 Emerging with a short position of Columbia Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Emerging and Columbia Treasury.
Diversification Opportunities for Columbia Emerging and Columbia Treasury
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Columbia is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Emerging Markets and Columbia Treasury Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Treasury Index and Columbia Emerging 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 Emerging Markets are associated (or correlated) with Columbia Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Treasury Index has no effect on the direction of Columbia Emerging i.e., Columbia Emerging and Columbia Treasury go up and down completely randomly.
Pair Corralation between Columbia Emerging and Columbia Treasury
Assuming the 90 days horizon Columbia Emerging Markets is expected to generate 0.78 times more return on investment than Columbia Treasury. However, Columbia Emerging Markets is 1.29 times less risky than Columbia Treasury. It trades about 0.36 of its potential returns per unit of risk. Columbia Treasury Index is currently generating about 0.15 per unit of risk. If you would invest 964.00 in Columbia Emerging Markets on June 10, 2025 and sell it today you would earn a total of 30.00 from holding Columbia Emerging Markets or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Emerging Markets vs. Columbia Treasury Index
Performance |
| Timeline |
| Columbia Emerging Markets |
| Columbia Treasury Index |
Columbia Emerging and Columbia Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Emerging and Columbia Treasury
The main advantage of trading using opposite Columbia Emerging and Columbia Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Emerging position performs unexpectedly, Columbia Treasury 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 Treasury will offset losses from the drop in Columbia Treasury's long position.| Columbia Emerging vs. Siit Equity Factor | Columbia Emerging vs. Aqr Long Short Equity | Columbia Emerging vs. Rbc China Equity | Columbia Emerging vs. Touchstone International Equity |
| Columbia Treasury vs. Dreyfusstandish Global Fixed | Columbia Treasury vs. Gmo Global Equity | Columbia Treasury vs. Enhanced Fixed Income | Columbia Treasury vs. Balanced Fund Retail |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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