Correlation Between MOBILE FACTORY and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY 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 MOBILE FACTORY and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOBILE FACTORY INC and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on MOBILE FACTORY 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 MOBILE FACTORY with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and COLUMBIA SPORTSWEAR.
Diversification Opportunities for MOBILE FACTORY and COLUMBIA SPORTSWEAR
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOBILE and COLUMBIA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and MOBILE FACTORY 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 MOBILE FACTORY INC 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 MOBILE FACTORY i.e., MOBILE FACTORY and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between MOBILE FACTORY and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon MOBILE FACTORY INC is expected to generate 1.91 times more return on investment than COLUMBIA SPORTSWEAR. However, MOBILE FACTORY is 1.91 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.07 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about -0.48 per unit of risk. If you would invest 575.00 in MOBILE FACTORY INC on October 14, 2024 and sell it today you would lose (10.00) from holding MOBILE FACTORY INC or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOBILE FACTORY INC vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| MOBILE FACTORY INC |
| COLUMBIA SPORTSWEAR |
MOBILE FACTORY and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOBILE FACTORY and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite MOBILE FACTORY and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY 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.| MOBILE FACTORY vs. Linedata Services SA | MOBILE FACTORY vs. Scottish Mortgage Investment | MOBILE FACTORY vs. Guangdong Investment Limited | MOBILE FACTORY vs. Alliance Data Systems |
| COLUMBIA SPORTSWEAR vs. CSSC Offshore Marine | COLUMBIA SPORTSWEAR vs. Boyd Gaming | COLUMBIA SPORTSWEAR vs. GungHo Online Entertainment | COLUMBIA SPORTSWEAR vs. International Game Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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