Correlation Between Columbia Large and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Columbia Large and Stone Ridge 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 Large and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Large Cap and Stone Ridge High, you can compare the effects of market volatilities on Columbia Large and Stone Ridge 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 Large with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Large and Stone Ridge.
Diversification Opportunities for Columbia Large and Stone Ridge
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Stone is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Large Cap and Stone Ridge High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge High and Columbia Large 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 Large Cap are associated (or correlated) with Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge High has no effect on the direction of Columbia Large i.e., Columbia Large and Stone Ridge go up and down completely randomly.
Pair Corralation between Columbia Large and Stone Ridge
Assuming the 90 days horizon Columbia Large Cap is expected to generate 6.77 times more return on investment than Stone Ridge. However, Columbia Large is 6.77 times more volatile than Stone Ridge High. It trades about 0.11 of its potential returns per unit of risk. Stone Ridge High is currently generating about 0.63 per unit of risk. If you would invest 2,923 in Columbia Large Cap on September 3, 2025 and sell it today you would earn a total of 162.00 from holding Columbia Large Cap or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Large Cap vs. Stone Ridge High
Performance |
| Timeline |
| Columbia Large Cap |
| Stone Ridge High |
Columbia Large and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Large and Stone Ridge
The main advantage of trading using opposite Columbia Large and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Large position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Columbia Large vs. Qs Large Cap | Columbia Large vs. Gmo Quality Fund | Columbia Large vs. Balanced Fund Retail | Columbia Large vs. Arrow Managed Futures |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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