Correlation Between Western Copper and COLUMBIA SPORTSWEAR

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Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and COLUMBIA SPORTSWEAR.

Diversification Opportunities for Western Copper and COLUMBIA SPORTSWEAR

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Western and COLUMBIA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and COLUMBIA SPORTSWEAR go up and down completely randomly.

Pair Corralation between Western Copper and COLUMBIA SPORTSWEAR

Assuming the 90 days trading horizon Western Copper and is expected to generate 1.49 times more return on investment than COLUMBIA SPORTSWEAR. However, Western Copper is 1.49 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.09 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.04 per unit of risk. If you would invest  92.00  in Western Copper and on November 27, 2024 and sell it today you would earn a total of  6.00  from holding Western Copper and or generate 6.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Western Copper and  vs.  COLUMBIA SPORTSWEAR

 Performance 
       Timeline  
Western Copper 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Western Copper is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
COLUMBIA SPORTSWEAR 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in COLUMBIA SPORTSWEAR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, COLUMBIA SPORTSWEAR is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Western Copper and COLUMBIA SPORTSWEAR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Western Copper and COLUMBIA SPORTSWEAR

The main advantage of trading using opposite Western Copper and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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.
The idea behind Western Copper and and COLUMBIA SPORTSWEAR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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