Correlation Between Federated High and Columbia Select
Can any of the company-specific risk be diversified away by investing in both Federated High and Columbia Select 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 Federated High and Columbia Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Columbia Select Large Cap, you can compare the effects of market volatilities on Federated High and Columbia Select 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 Federated High with a short position of Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Columbia Select.
Diversification Opportunities for Federated High and Columbia Select
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Columbia is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Columbia Select Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Large and Federated High 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 Federated High Yield are associated (or correlated) with Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Large has no effect on the direction of Federated High i.e., Federated High and Columbia Select go up and down completely randomly.
Pair Corralation between Federated High and Columbia Select
Assuming the 90 days horizon Federated High is expected to generate 1.48 times less return on investment than Columbia Select. But when comparing it to its historical volatility, Federated High Yield is 3.29 times less risky than Columbia Select. It trades about 0.12 of its potential returns per unit of risk. Columbia Select Large Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,095 in Columbia Select Large Cap on April 11, 2025 and sell it today you would earn a total of 811.00 from holding Columbia Select Large Cap or generate 26.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Columbia Select Large Cap
Performance |
| Timeline |
| Federated High Yield |
| Columbia Select Large |
Federated High and Columbia Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Columbia Select
The main advantage of trading using opposite Federated High and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Columbia Select 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 Select will offset losses from the drop in Columbia Select's long position.| Federated High vs. Knights Of Umbus | Federated High vs. Cb Large Cap | Federated High vs. Prudential Qma Large Cap | Federated High vs. Jhancock Disciplined Value |
| Columbia Select vs. Nationwide Fund Class | Columbia Select vs. Small Cap Stock | Columbia Select vs. Astor Star Fund | Columbia Select vs. Centerstone Investors Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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