Correlation Between CITY OFFICE and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and COLUMBIA SPORTSWEAR.
Diversification Opportunities for CITY OFFICE and COLUMBIA SPORTSWEAR
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITY and COLUMBIA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between CITY OFFICE and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, CITY OFFICE is 3.42 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.09 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.32 per unit of volatility. If you would invest 8,150 in COLUMBIA SPORTSWEAR on November 3, 2024 and sell it today you would earn a total of 550.00 from holding COLUMBIA SPORTSWEAR or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| CITY OFFICE REIT |
| COLUMBIA SPORTSWEAR |
CITY OFFICE and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite CITY OFFICE and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. Great Portland Estates | CITY OFFICE vs. Easterly Government Properties | CITY OFFICE vs. Office Properties Income |
| COLUMBIA SPORTSWEAR vs. Hua Hong Semiconductor | COLUMBIA SPORTSWEAR vs. CAIRN HOMES EO | COLUMBIA SPORTSWEAR vs. CITY OFFICE REIT | COLUMBIA SPORTSWEAR vs. MagnaChip Semiconductor Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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