Correlation Between PT Charoen and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both PT Charoen and Columbia Sportswear 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 PT Charoen and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Charoen Pokphand and Columbia Sportswear, you can compare the effects of market volatilities on PT Charoen and Columbia Sportswear 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 PT Charoen with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charoen and Columbia Sportswear.
Diversification Opportunities for PT Charoen and Columbia Sportswear
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0CP1 and Columbia is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PT Charoen Pokphand and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and PT Charoen 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 PT Charoen Pokphand are associated (or correlated) with Columbia Sportswear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sportswear has no effect on the direction of PT Charoen i.e., PT Charoen and Columbia Sportswear go up and down completely randomly.
Pair Corralation between PT Charoen and Columbia Sportswear
Assuming the 90 days trading horizon PT Charoen Pokphand is expected to under-perform the Columbia Sportswear. In addition to that, PT Charoen is 2.09 times more volatile than Columbia Sportswear. It trades about -0.03 of its total potential returns per unit of risk. Columbia Sportswear is currently generating about 0.08 per unit of volatility. If you would invest 8,200 in Columbia Sportswear on October 29, 2024 and sell it today you would earn a total of 300.00 from holding Columbia Sportswear or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Charoen Pokphand vs. Columbia Sportswear
Performance |
| Timeline |
| PT Charoen Pokphand |
| Columbia Sportswear |
PT Charoen and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Charoen and Columbia Sportswear
The main advantage of trading using opposite PT Charoen and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charoen position performs unexpectedly, Columbia Sportswear 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 Sportswear will offset losses from the drop in Columbia Sportswear's long position.| PT Charoen vs. Archer Daniels Midland | PT Charoen vs. Tyson Foods | PT Charoen vs. MOWI ASA SPADR | PT Charoen vs. Mowi ASA |
| Columbia Sportswear vs. Meta Financial Group | Columbia Sportswear vs. Ameriprise Financial | Columbia Sportswear vs. Virtu Financial | Columbia Sportswear vs. ALEFARM BREWING DK 05 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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