Correlation Between Gemfields Group and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Gemfields Group 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 Gemfields Group and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemfields Group Limited and Columbia Sportswear, you can compare the effects of market volatilities on Gemfields Group 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 Gemfields Group with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemfields Group and Columbia Sportswear.
Diversification Opportunities for Gemfields Group and Columbia Sportswear
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gemfields and Columbia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group Limited and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Gemfields Group 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 Gemfields Group Limited 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 Gemfields Group i.e., Gemfields Group and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Gemfields Group and Columbia Sportswear
Assuming the 90 days horizon Gemfields Group Limited is expected to under-perform the Columbia Sportswear. In addition to that, Gemfields Group is 6.21 times more volatile than Columbia Sportswear. It trades about -0.14 of its total potential returns per unit of risk. Columbia Sportswear is currently generating about 0.07 per unit of volatility. If you would invest 8,200 in Columbia Sportswear on October 30, 2024 and sell it today you would earn a total of 250.00 from holding Columbia Sportswear or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemfields Group Limited vs. Columbia Sportswear
Performance |
| Timeline |
| Gemfields Group |
| Columbia Sportswear |
Gemfields Group and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemfields Group and Columbia Sportswear
The main advantage of trading using opposite Gemfields Group and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemfields Group 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.| Gemfields Group vs. Entravision Communications | Gemfields Group vs. Tianjin Capital Environmental | Gemfields Group vs. MOVIE GAMES SA | Gemfields Group vs. CITIC Telecom International |
| Columbia Sportswear vs. Monument Mining Limited | Columbia Sportswear vs. INTERCONT HOTELS | Columbia Sportswear vs. Globex Mining Enterprises | Columbia Sportswear vs. Pebblebrook Hotel Trust |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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